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A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia

Investors are looking for an appropriate investment portfolio to satisfy their investment preferences and financial needs. Hence, the introduction of investment linked plans provide an opportunity to invest and protect their funds in an appropriate way. This study is aimed to compare the performance...

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Main Authors: Abdul Aziz, Mariam, Redzuan, Nur Harena, Othman, Anwar Hasan Abdullah
Format: Conference or Workshop Item
Language:English
English
English
English
Published: 2020
Subjects:
HG8011 Insurance
HG8719 Islamic Insurance Takaful
Online Access:http://irep.iium.edu.my/87225/1/AICIF%202020_Mariam%2C%20Harena%2C%20Anwar.pdf
http://irep.iium.edu.my/87225/7/AICIF%202020_Harena.pdf
http://irep.iium.edu.my/87225/8/FIXED-Timetable-Parallel-Session-AICIF-2020.pdf
http://irep.iium.edu.my/87225/9/Nur%20Harena%20Redzuan.pdf
http://irep.iium.edu.my/87225/
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spelling my.iium.irep.872252022-01-06T04:08:01Z http://irep.iium.edu.my/87225/ A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia Abdul Aziz, Mariam Redzuan, Nur Harena Othman, Anwar Hasan Abdullah HG8011 Insurance HG8719 Islamic Insurance Takaful Investors are looking for an appropriate investment portfolio to satisfy their investment preferences and financial needs. Hence, the introduction of investment linked plans provide an opportunity to invest and protect their funds in an appropriate way. This study is aimed to compare the performance of both takaful and insurance investment linked plans in Malaysia in order to help the investors in planning and determining their portfolio diversification. The study uses correlation analysis to examine the existing relationship between the investment linked plans’ returns with the market returns. The independent sample t-test is conducted to investigate the significance differences between both investment linked plans. The study examines the return and risk profiles of both investment linked plans by measuring the secondary data using the net asset value (NAVs) of the selected funds on a monthly basis. The data covers a three-year period from January 2016 to December 2018. Three models of the standard performance measurements are employed which are: Sharpe, Treynor, and Jensen indices to measure the funds’ performance. The findings show that the takaful investment linked plans outperform the insurance investment linked plans in Malaysia during the study period, and the takaful investment linked plans produce greater returns as compared to the insurance counterpart. The study also finds that none of both the takaful and insurance investment linked plans outperform their markets except in Year 2. Furthermore, the findings of this research indicate that there is no difference between the performance of both investment linked plans based on the three performance indices during the study period. As the outcome this research, it is advisable for potential investors of investment linked plan, who require both protection and investment to consider the takaful product as they can expect a higher profit than the counterpart. 2020-11 Conference or Workshop Item NonPeerReviewed application/pdf en http://irep.iium.edu.my/87225/1/AICIF%202020_Mariam%2C%20Harena%2C%20Anwar.pdf application/pdf en http://irep.iium.edu.my/87225/7/AICIF%202020_Harena.pdf application/pdf en http://irep.iium.edu.my/87225/8/FIXED-Timetable-Parallel-Session-AICIF-2020.pdf application/pdf en http://irep.iium.edu.my/87225/9/Nur%20Harena%20Redzuan.pdf Abdul Aziz, Mariam and Redzuan, Nur Harena and Othman, Anwar Hasan Abdullah (2020) A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia. In: 8th ASEAN Universities International Conference on Islamic Finance (8th AICIF 2020), 24th-26th November 2020, Bogor Indonesia. (Unpublished)
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
English
English
topic HG8011 Insurance
HG8719 Islamic Insurance Takaful
spellingShingle HG8011 Insurance
HG8719 Islamic Insurance Takaful
Abdul Aziz, Mariam
Redzuan, Nur Harena
Othman, Anwar Hasan Abdullah
A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia
description Investors are looking for an appropriate investment portfolio to satisfy their investment preferences and financial needs. Hence, the introduction of investment linked plans provide an opportunity to invest and protect their funds in an appropriate way. This study is aimed to compare the performance of both takaful and insurance investment linked plans in Malaysia in order to help the investors in planning and determining their portfolio diversification. The study uses correlation analysis to examine the existing relationship between the investment linked plans’ returns with the market returns. The independent sample t-test is conducted to investigate the significance differences between both investment linked plans. The study examines the return and risk profiles of both investment linked plans by measuring the secondary data using the net asset value (NAVs) of the selected funds on a monthly basis. The data covers a three-year period from January 2016 to December 2018. Three models of the standard performance measurements are employed which are: Sharpe, Treynor, and Jensen indices to measure the funds’ performance. The findings show that the takaful investment linked plans outperform the insurance investment linked plans in Malaysia during the study period, and the takaful investment linked plans produce greater returns as compared to the insurance counterpart. The study also finds that none of both the takaful and insurance investment linked plans outperform their markets except in Year 2. Furthermore, the findings of this research indicate that there is no difference between the performance of both investment linked plans based on the three performance indices during the study period. As the outcome this research, it is advisable for potential investors of investment linked plan, who require both protection and investment to consider the takaful product as they can expect a higher profit than the counterpart.
format Conference or Workshop Item
author Abdul Aziz, Mariam
Redzuan, Nur Harena
Othman, Anwar Hasan Abdullah
author_facet Abdul Aziz, Mariam
Redzuan, Nur Harena
Othman, Anwar Hasan Abdullah
author_sort Abdul Aziz, Mariam
title A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia
title_short A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia
title_full A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia
title_fullStr A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia
title_full_unstemmed A comparative analysis on the performance of investment linked plan for insurance and takaful in Malaysia
title_sort comparative analysis on the performance of investment linked plan for insurance and takaful in malaysia
publishDate 2020
url http://irep.iium.edu.my/87225/1/AICIF%202020_Mariam%2C%20Harena%2C%20Anwar.pdf
http://irep.iium.edu.my/87225/7/AICIF%202020_Harena.pdf
http://irep.iium.edu.my/87225/8/FIXED-Timetable-Parallel-Session-AICIF-2020.pdf
http://irep.iium.edu.my/87225/9/Nur%20Harena%20Redzuan.pdf
http://irep.iium.edu.my/87225/
_version_ 1724072779715706880
score 13.211869

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