To guarantee an enterprise’s survival and its development, the demand for insurance exists. This will possibly result to an individual resorting to risky actions for the sake of his/her organization. In fact, the rate of insurance penetration is still low although entrepreneurs’ businesses are growing rapidly. This paper aims to identify specific elements in an organization which give impacts on the general demand for Takaful product. Furthermore, readings of literature are studied in detail to create organization’s characteristics for insurance demand. This literature reading is also done in order to describe the existing models of general Takaful demand. As a result, it is found that the characteristics of organization for general insurance demand comprise of geographical concentration, line of business, size, and regulation. In this study, the predicted utility theory of the organization’s owner is assimilated for the creation of a suitable model and framework for the research regarding the demand for general Takaful. In previous studies, the aspect of the impact of the risk-taking propensity, depending on the level of risk, as a key mediating variable were not focused on. Additionally, this paper also aims to provide future suggestions circulating around this matter. This matter holds a relatively high significance where thorough examination and documentation is conducted. Another reason for its significance is the scarce amount of research on this area in Malaysia. Besides, the number of empirical research performed on Takaful is still scarce although the investigation into Takaful demand, specifically regarding the methods of enhancing market penetration, has been conducted for almost 30 years in Malaysia.
Adams, M., Lin, C., & Zou, H. (2011). Chief Executive Officer Incentives, Monitoring, and Corporate Risk Management: Evidence from Insurance Use. Journal of risk and Insurance, 78(3), 551-582.
Balabanis, G. I., and E. S. Katiskea. 2003. Being an entrepreneurial exporter – does it pay? International Business Review 12:233–52
Burhan, N. A. S., Razak, R. C., Salleh, F., & Tovar, M. E. L. (2017). The higher intelligence of the ‘creative minority’provides the infrastructure for entrepreneurial innovation. Intelligence, 65, 93-106.
Burhan, N. A. S., Salleh, F., & Burhan, N. M. G. (2015). National intelligence and private health expenditure: Do high IQ societies spend more on health insurance? Intelligence, 52, 1-8.
Burnett, J. J. & Palmer, B. A. (1984). Examining life insurance ownership through demographic and psychographic characteristics. Journal of Risk and Insurance, 51(3), 453–467.
Carland, J.W., III, Carland, J.W., Carland, J.A & Pearce, J.W. (1995). Risk Taking propensity among entrepreneurs, small business owners and managers. Journal of Business and Entrepreneurship, 7(1): 15-23.
Chen, T.-j., & Li, S.-h. (2010). Directors' & officers' insurance, corporate governance and firm performance. International Journal of Disclosure and Governance, 7(3), 244-261.
Cole, C. R., & McCullough, K. A. (2006). A Reexamination of The Corporate Demand for Reinsurance. Journal of risk and Insurance, 73(1), 169-192.
Eisenhauer, J. G. (2004). Risk aversion and the willingness to pay for insurance: a cautionary discussion of adverse selection. Risk Management and Insurance Review, 7(2), 165–175.
Fang, Y., Kui, C., & Zhu, M. (2011). Demand for Corporate Insurance in China. Chinese Economy, 44(6), 15-29. doi: 10.2753/1097-1475440602
Hoy, M. & Robson, A. (1981). Insurance as a Giffen Good. Economics Letters, 8(), 47–51
Hamid, M. A., Osman, J., & Nordin, B. (2009). Determinants of corporate demand for Islamic Insurance in Malaysia. International Journal of Economics and Management, 3(2), 278-296.
Hoyt, R. E., & Ho, K. (2000). On the demand for corporate property insurance. Journal of risk and Insurance, 67(1), 91-107.
Ibrahim, MD., Salleh, F., and Awang, Z.,(2015) “The Effects of Financial Factors on Takaful Demand in Malaysia”. Journal of Entrepreneurship and Business, 3 (1). pp. 17-29. ISSN 2289-8298
Jacobson, S. & Petrie, R. (2009). Learning from mistakes: What do inconsistent choices over risk tell us? Journal of Risk and Uncertainty, 38, 143–158
Khan, Muhsin. Surah Al Maidah. Quran in Word, 1.3, 2. Retreived from http://www.geocities.com/mtaufiq.rm/quran.html
Khan, Muhsin. Surah Al Imran. Quran in Word, 1.3, 104. Retreived from http://www.geocities.com/mtaufiq.rm/quran.html
Koiranen, M., Hyrsky, K. & Tunnanen, M. (1997). Risk-taking propensity of us and Finnish sme's: Findings on similarities and differences, Academy of Entrepreneurship Journal, 2(2), 59-69.
Leko-Simic. M & Horvat J. (2006). Risk Taking Propensity and Export Performance of Creation Exports. Manging Global Transitions 4(4): 313-326
Mayers, D., & Smith Jr, C. W. (1990). On the corporate demand for insurance: evidence from the reinsurance market. Journal of Business, 19-40.
Michel-Kerjan, E., Raschky, P., & Kunreuther, H. (2011). Corporate demand for insurance: An empirical analysis of the US market for catastrophe and non-catastrophe risks: National Bureau of Economic Research.
Nicholson, N., Fenton-O'Creevy, M., Soane, E. and P. Willman, 2002, Risk propensity and personality. COR working paper.
Ottaviani C. and D. Vandone (2011), Decision-making under uncertainty and demand for insurance: an empirical study, Departemental Working Papers, Department of Economics, Business and Statistics at Università degli Studi di Milano, http://econpapers.repec.org/RePEc:mil:wpdepa:2011-05.
Salleh, F., Ibrahim, MD., Awang. Z., Yazid, AS., Wan Daud,WN., Abdul Razak, R., Yaakub, N., Ghazali, PL., Mohamad, M., and Hashim, NH., (2017) “Does Perception Towards Insurab
In-Text Citation: (Salleh et al., 2018)
To Cite this Article: Salleh, F., Ibrahim, M. D., Yazid, A. S., Awang, Z., Afthanorhan, A., Rashid, N., & Ghazali, P. L. (2018). Micro Small and Medium Enterprise Demand for General Takaful: Proposed Theoretical Framework and Hypotheses Development. International Journal of Academic Research in Business and Social Sciences, 8(12), 599–612.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
