Zuriah Abdul Rahman

Adverse selection and its consequences on medical and health insurance and takaful in Malaysia

Purpose - The purpose of this paper is to investigate first, the consumer buying behaviour and claims pattern of medical and health insurance (MHI)/medical and health Design/methodology/approach - The study was conducted on respondents from the insurance industry in Malaysia. Findings - It was found that most claims were rejected due to the discovery of some irregularities by the managed care organizations (MCO) while the Islamic insurers claims experience, was otherwise. During the buying behaviour stage of MHT, there are fewer tendencies to withhold information but during the claiming stage, due to the generous level of compensation and their awareness of the coverage available naturally influence them to submit excessive claims. To a certain extent moral hazard is present when claims are made for longer disability durations than necessary, and having high average claims per person even for shorter duration disabilities. Research limitations/implications - The paper concentrates only on the MHI/MHT in Malaysia. Practical implications - The results provide insights on how the Malaysian insurance industry and other organizations of a similar structure could improve on their business performance. Originality/value - This paper is perhaps one of the first to address adverse selection and its consequences on MHI/MHT in Malaysia.

Sukuk investment: Comparison of the profits obtained by usingIjarah andMusharakahMutanaqisah principles with long-term tenure

Purpose - The purpose of this paper is to determine whether the amount of profits gained from Design/methodology/approach - In total, two models were used to calculate profit. These models are based on Findings - javax.xml.bind.JAXBElement@44ca9540 Research limitations/implications - The formulas and results shown in this research are just one of the mathematical approaches that can be used for decision making in Practical implications - The results in the research will assist in making a quick decision on what type of Originality/value - Many researchers have attempted to study the implications of using mathematical formulas to guide decision making on the choice of

The role of goods, money and securities markets in promoting family takaful in Malaysia

In line with the governments policy to promote Malaysia as an international hub for Islamic banking and finance, the dynamic effects of goods, money and securities markets on the development of family takaful (Islamic life insurance) in the country during the period from 1999 : Q1 to 2006 : Q4 are empirically examined. Specifically, it seeks to explore the short- and long-run dynamics and the causalities between takaful performance and the goods market, money market, and securities market. The findings indicate that, the goods market is the most significant market in promoting family takaful in Malaysia. This implies that, the governments effort has been successful, thus far.

Halal Financial Product: Reformation of Microtakaful to Suit the Lower Strata of Society in Malaysia

The 2015 economic goals of the Organization of Islamic Countries were to develop Islamic microinsurance and microcredit as instruments for poverty eradication. Commercial insurers have introduced and launched these instruments to help the lower income group. However, results obtained from numerous studies found that the demand for these products has not increased, leading to a few of them withdrawing from the market. This study was conducted to seek public perception on this phenomenon. The objectives are to determine the vulnerabilities faced by the lower income group, followed by their savings behavior, and to examine the effect of government’s role in providing financial protection to them. A statistical technique, structural equation modeling (SEM) to test for relationship between the said factors, was performed on data derived from 672 respondents. Findings indicated that there are various risk exposures due to their vulnerabilities. They have sporadic savings pattern, but are willing to contribute to insurance protection if the amount is within their financial capabilities. However, the most influential factor, government policy was found to be critically required to create demand due to improved human development and enhancing the quality of their life. In marketing this product, commercial Islamic insurers need to give due consideration to these factors to enable them to compete effectively with conventional insurers in order to capture the lower income population market. Such government policy, if implemented with the right product designed, will benefit the lower income group and the Malaysian economy as a whole.