A Literature Review: Determinants for Family Takaful Demand in Malaysia - Breaking Out of the Shadow of Conventional Insurance

Abstract

Malaysia is currently regarded as a leading contributor to the Islamic finance industry. Over the last decade, this industry has witnessed tremendous growth across the country. One of the four main markets of the Islamic finance industry is the Takaful industry. This industry is expected to sustain its growth momentum as we move into the 21st century world of technology and innovation. However, Takaful penetration among Malaysians today is still relatively low and stands at only 15.2% compared to the 61.3% Muslim population in the country. While the Takaful industry still has a long way to go to be on par with conventional insurance, it has nevertheless laid the foundations necessary to bridge the gap. Several studies have been done to identify the challenges and future prospects of the Takaful industry. This paper aims to discuss the plausible determinants of family Takaful demand in Malaysia as found via a literature review. This study is useful as a guide for stakeholders in the industry to revisit their strategies to gain sufficient momentum, so as to provide a significant challenge to the conventional insurance industry.