The efficiency of life insurance and family Takaful in Malaysia: Relative efficiency using the stochastic cost frontier analysis

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Citations (Scopus)

Abstract

This paper focuses on the Stochastic cost Frontier Analysis (SFA) approach, in an attempt to measure the relationship between efficiency and organizational structure for Takaful and insurance operators in Malaysia's dual financial system. This study applied a flexible cost functional form i.e., Fourier Flexible Functional Form, for a sample consisting of 19 firms, chosen between 2002 and 2010, by employing the Battese and Coelli invariant efficiency model. The findings show that on average, there is a significant difference in cost efficiency between the Takaful industry and the insurance industry. It was found that Takaful has lower cost efficiency than conventional insurance, which shows that the organization form has an influence on efficiency. Overall, it was observed that the level of efficiency scores for both life insurance and family Takaful do not vary across time.

Original languageEnglish
Title of host publicationAIP Conference Proceedings
Pages1098-1104
Number of pages7
Volume1522
DOIs
Publication statusPublished - 2013
Event20th National Symposium on Mathematical Sciences - Research in Mathematical Sciences: A Catalyst for Creativity and Innovation, SKSM 2012 - Putrajaya
Duration: 18 Dec 201220 Dec 2012

Other

Other20th National Symposium on Mathematical Sciences - Research in Mathematical Sciences: A Catalyst for Creativity and Innovation, SKSM 2012
CityPutrajaya
Period18/12/1220/12/12

Fingerprint

cost analysis
Malaysia
industries
costs
operators

Keywords

  • Cost efficiency
  • Stochastic frontier analysis

ASJC Scopus subject areas

  • Physics and Astronomy(all)

Cite this

The efficiency of life insurance and family Takaful in Malaysia : Relative efficiency using the stochastic cost frontier analysis. / Roziana, Baharin; Isa, Zaidi.

AIP Conference Proceedings. Vol. 1522 2013. p. 1098-1104.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Roziana, B & Isa, Z 2013, The efficiency of life insurance and family Takaful in Malaysia: Relative efficiency using the stochastic cost frontier analysis. in AIP Conference Proceedings. vol. 1522, pp. 1098-1104, 20th National Symposium on Mathematical Sciences - Research in Mathematical Sciences: A Catalyst for Creativity and Innovation, SKSM 2012, Putrajaya, 18/12/12. https://doi.org/10.1063/1.4801253
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