Abstract:

Takaful or Islamic Insurance has emerged as a distinguishable segment of Islamic Financial Products (IFPs) by providing Shariah compliant alternative to conventional counterpart for risk protection. For its critical connection with religion this paper is interested to analyze how the demand is affected through the influence of religion on human conduct. Precisely this study considers religiosity - a multidimensional construct which combines different facets of religious impacts on individuals’ deportment and its impact on takaful participation and demand. To draw a causal inference, the study uses data of 15 (fifteen) years from 17 (seventeen) mostly Muslim majority countries. In a cross country setting and employing the static panel data model the study finds significant impact of religion in creating takaful demand. The analysis reveals that stronger the degree of religiosity higher will be the demand for takaful.  This work expands the religiosity study allowing for Muslim religiosity which is limited in the existing research stream. Subsequently, the study findings contribute to stakeholders’ decision and policy making to stimulate the development of the takaful sector.