Table of Contents
CHAPTER 1 3
1.0 Introduction 3
1.1 Background of Study 4
1.2 Problem Statement 7
1.3 Research Questions 9
1.3.1 Main Research Question 9
1.3.2 Specific Research Questions 9
1.4 Research Objectives 10
1.5 Scope of Study 12
1.6 Significance of Study 13
CHAPTER 2 14
2.1 Literature Review on Insurance Sector (Conventional & Takaful) 14
2.2 Literature Review on Topic 16
2.3 Literature Review on Stability of Underwriting Operation 18
2.4 Literature Review on Solvency Margin 19
2.5 Literature Review on Retakaful/Reinsurance Dependence 20
2.7 Literature Review on Equity Return 22
CHAPTER 3 23
3.1 Data Collection 23
3.2 Variables 23
3.2.1 Dependent variables 24
3.2.2 Independent variables 24
3.3 Theoretical Framework 27 …show more content…
This pool generates the takaful fund. The amount of contribution depends on the type of cover, nature of the risk and the period of the cover. The takaful fund is managed on behalf of the participants by a takaful operator who charges an agreed fee which could be a fixed fee or a percentage of the profit or even both. The takaful fund is used to pay any claims by participants and any surplus, after reducing any expenditure and reserves, belongs to the participants and may be distributed among participants in the form of cash dividends or discounts towards future contributions (Engku Rabiah Adawiah Engku Ali and P.Odierno, 2008).
There are several differences between takaful and conventional insurance. The main difference is that in takaful, the participants make a donation to the takaful fund to provide protection for each other against risks, whereas in conventional insurance the premium is paid to the insurance company which bears all of the …show more content…
Thus, we can conclude that the positive correlation between the variable (IY,SM) and (IY,ER). On the other hand, the pair of (IY,RR) and (IY,SUA) and (IY,LTY) has p-value -0.318564 and -0.567798 and -0.156425. Therefore, we failed to reject the null hypothesis at 5% significance level and conclude that there is negative correlation between IY and OC and SUA and LTY
This also can be explains when SM and ER increase by 1% the IY also will increase by 62.45% and 3.83% respectively. Contrary, when RR, SUA and LTY is increase by 1% the IY will decrease by 31.86%, 56.78% and 15.64%
While for the pair of (SM,SUA) and (SM,ER) are 0.081010 and 0.198989, a positive correlation. Besides that, a pair of (RR,SUA), (RR,LTY), and (RR,ER) are 0.042328, 0.624661, and 0.247439, also positive. Moreover (SUA,ER), (LTY,ER) and (ER,LTY) are 0.107319 and 0.120462 are positive correlation.
In addition, the p-value for the pair (SM,RR) and (SM,LTY) are -0.370805 and -0.189205 respectively. Both RR and LTY is failed to reject at 5% significance level. Both variables have negative correlation with SM. Besides that, the pair of (SUA,LTY) has p-value -0.024152 which indicate that the null hypothesis is failed to rejected at 5% significance level. The variable has negative