Motivating factors for consumers to participate in takāful: a survey by Indian insurance policyholders

Syed Ahmed Salman · Rusni Bt. Hassan

13 citations0/0 files storedJournal of Islamic accounting and business research

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Islamic Finance and Banking Studies Insurance and Financial Risk Management Halal products and consumer behavior

Abstract

Purpose The purpose of this study is to examine the perception and acceptability of insurance policyholders to introduce takāful in India. The primary focus of this research is insurance policyholders because they currently have insurance policies and it is believed that they are familiar with the concept of insurance, compared to the people who do not have any insurance policy. Design/methodology/approach New product diffusion theory is used in developing the hypothesis and a questionnaire. In this research, the population is unknown, and hence, the non-probability sample is used. Quota sampling and snowball sampling methods are used in this survey, with a sample size of 909 respondents, including Muslim and non-Muslim policyholders. The external factors that motivate potential policyholders to participate in takāful are the independent variable here; while the respondents’ actual willingness to participate in takāful is the dependent variable. Regression analysis is performed to analyse the data. Findings Based on 909 respondents, it is found that the factors such as cost vs benefits, marketing and promotion and social and religion play a significant role in a consumers’ decision-making at 1% significant level overall. The attribute of agents can influence the consumers at a 10% significant level overall. However, other factors, namely, accessibility, availability and service quality, product features and reputation of the company cannot pursue the consumers in India. Research limitations/implications The questionnaires are distributed in 10 cities from nine states out of 28 states in India. Thus, it covers only one-third of the states. Future research can expand the respondents from other states that have not been researched. Practical implications India is opening to foreign investments in the Indian insurance industry, and thus, the findings are useful for industrial players, investors, policymakers for the development of takāful in India. Originality/value Limited research has been done in previous studies and this research is the pinnacle within-depth survey regarding takāful in India.

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References

2010Exploratory Factor Analysis: A Five-Step Guide for Novices 2001Accessing Hidden and Hard-to-reach Populations: Snowball Research Strategies 2007Why do Malaysian customers patronise Islamic banks?2016Do Muslims intend to participate in Islamic insurance?2006Evidence on the relationship between Takaful insurance and fundamental perception of Islamic principles 2012Perception and Adoption of Islamic Insurance in Malaysia: An Empirical Study 2011Effective Advertising and its Influence on Consumer Buying Behavior 2013A Conceptual Model of Literature Review for Family Takaful (Islamic Life Insurance) Demand in Malaysia

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