Do tourists have better protection by taking travel takaful? A comparison in Malaysia

Abstract

The paper aims to present a comprehensive comparison between Travel Insurance and Travel Takaful development in Malaysia in terms of the product offered and coverage provided to provide better strategies for Travel Takaful market players. The main source of data for this study is the Product Disclosure Sheet (PDS) of Travel Insurance and Travel Takaful Plan, which were found using a systematic review. Using Ansoff Matrix Theories, the study classified the strategies of General Takaful and Insurance operators in managing Travel Protection Plan services and marketing segments. Furthermore, the details of the coverage, price, type of claim and channel to purchase Travel Insurance and Takaful were compared and analysed quantitatively using cross-comparison frequency. Analysis found that, as of August 2021, there were only 15 Travel Takaful Plans available, which are provided by 4 General Takaful operators, as compared to 60 Travel Insurance plans, which are provided by 17 General Insurance operators. This indicates a significant gap between the two types of protection plans. This study also discovered that bank institutions and airlines have collaborated with Insurance and General Takaful operators to create more diverse subscribing platforms for customers by also providing credit card and cashless medical claim methods. Furthermore, extensive coverage for Travel Takaful includes specialities such as Qurban, Badal Haji and Waqf, all of which entice Muslim travellers to purchase Takaful coverage. In addition, some Travel Insurance and Travel Takaful operators have added new coverage for quarantine period expenses in response to the COVID-19 pandemic. Lastly, this study proposes a framework to improve Travel Takaful products offered in the market. The study contributes to the body of knowledge in Takaful by presenting a comparative analysis between Travel Protection in Insurance and General Takaful operators, showing the development of the products and coverage offered by both industries. It is expected to become a significant reference, especially for Takaful market players, in order to build strong strategies toward Travel Takaful subscriptions. strengthening the function of zakat institutions as a socio-economic balancer.