The Tendency to Subscribe Takaful: A Proposed Conceptual Framework

Takaful market is expected to become one the important aspects that contribute to Malaysian economic growth and social development. Despite many forms of incentives provided by the government to inculcate its demand, it is undeniable that the level of penetration by Takaful providers is still relatively low. It is recorded that the growth of the market penetration for the past ten years (2005-2014) is no more than 15%. The available literatures have shown that the issue of awareness and misconception of Takaful are among the reasons that might have hindered the progression of Takaful. Thus, the main purpose of this study is to discuss the plausible factors that influence the tendency to subscribe with the Islamic Insurance (Takaful). A conceptual framework consists of three factors namely the demographic factors, awareness and knowledge, and performance of Takaful operators is proposed. This article contributes to both the body of knowledge and practice by offering insights on the factors that may affect the demand for Takaful especially from the perspective of developing nation, Malaysia.