Factors Influencing the Choice of Takaful Over Conventional Insurance: The Case of Malaysia

The present research attempts to study the factors that influence Malaysians to choose Takaful over conventional insurance. The study employs a qualitative research approach, conducting four intensive interviews with customers and Takaful Operators, who were selected from Klang Valley area in Malaysia. The respondents represent prominent Takaful Operators and their customers. The findings from the in-depth interviews led to the following major propositions; that Takaful customers have a clear concept of Takaful and the requirement of Shariah compliance; takaful is necessary for Muslims as a replacement of conventional insurance; takaful customers have awareness on the relationship between insurance and religion in contemporary business; the roles of Takaful agents in explaining the concept of Takaful and its benefits as acts of worship (Ibadah); the obligation by Takaful agents in promoting Takaful products to Muslims as acts of (dak’wah); and the growth of Takaful business remains slow compared to conventional insurance in the Klang valley area in Malaysia. Several implications of the research were further discussed