Document Type : Research Article


1 The Moderating Effect of Risk-Taking Propensity on the Relationship between Perception towards Insurable Risks and General Takaful Demand Among SMEs

2 Faculty of Business and Management, Universiti Sultan Zainal Abidin, Malaysia;

3 Department of Social and Development Sciences, Faculty of Human Ecology, Universiti Putra Malaysia, Serdang, Malaysia;


This study aimed to evaluate the influence of perception towards insurable risks on the general Takaful demand via risk-taking propensity among small and medium enterprises (SMEs) in Malaysia. This study presented essential insights that would benefit Takaful operators in determining and enhancing general Takaful demand among SMEs. Studies have identified two major factors of risk behaviour that influence general insurance demand, which are the perception towards insurable risks (independent variable) and risk-taking propensity (moderator). This study presented theoretically significant information on the incorporation of perception towards insurable risks and risk-taking propensity to explain the general Takaful model. For this study, a total of 278 SMEs in Malaysia were sampled. All gathered data were analysed using AMOS for the testing of hypotheses. The results of structural equation modelling (SEM) revealed perception towards insurable risks as the key factor that drives the general Takaful confidence in decision making and risk-taking propensity as a moderator in the relationship between the perception towards insurable risks and general Takaful demand. Apart from providing a clearer overview of Takaful demand among SMEs in Malaysia, the obtained findings of this study also highlighted the significance of healthy and ethical behaviour in decision making in order to protect the organisational resources and accomplishments.


Main Subjects

  1. Aaby, Nils‐Erik, and Stanley F. Slater. 1989. “Management Influences on Export Performance: A Review of the Empirical Literature 1978‐1988.” International Marketing Review 6(4). doi: 10.1108/EUM0000000001516.
  2. Aziz, Mohd Ikhwan, Asyraf Afthanorhan, and Zainudin Awang. 2016. “Talent Development Model for a Career in Islamic Banking Institutions: A SEM Approach” edited by T. Nisar. Cogent Business & Management 3(1). doi: 10.1080/23311975.2016.1186259.
  3. Beisswingert, Birgit M., Keshun Zhang, Thomas Goetz, Ping Fang, and Urs Fischbacher. 2015. “The Effects of Subjective Loss of Control on Risk-Taking Behavior: The Mediating Role of Anger.” Frontiers in Psychology 6. doi: 10.3389/fpsyg.2015.00774.
  4. Bota, Oana Alina. 2013. “Job Satisfaction of Teachers.” Procedia - Social and Behavioral Sciences 83:634–38. doi: 10.1016/j.sbspro.2013.06.120.
  5. Burhan, N. A. S., R. Che Razak, F. Salleh, and M. E. Labastida Tovar. 2017. “The Higher Intelligence of the ‘Creative Minority’ Provides the Infrastructure for Entrepreneurial Innovation.” Intelligence 65:93–106. doi: 10.1016/j.intell.2017.09.007.
  6. Buzatu, Cristian. 2013. “The Influence of Behavioral Factors on Insurance Decision – A Romanian Approach.” Procedia Economics and Finance 6:31–40. doi: 10.1016/S2212-5671(13)00110-X.
  7. Dakhlallh, M. M., N. Rashid, W. A. Wan Abdullah, and H. J. Al Shehab. 2020. “Audit Committee and Tobin’s Q as a Measure of Firm Performance among Jordanian Companies.” Journal of Advanced Research in Dynamical and Control Systems 12(1):28–41. doi: 10.5373/JARDCS/V12I1/20201005.
  8. Daud, W. N. W., F. A. Zainol, F. Salleh, A. S. Yazid, S. Ismail, R. Markom, and N. D. Mukhtar. 2017. “Takaful Rules and Regulations for ASEAN Countries: Takaful Player Perspectives.” Pp. 2363–69 in Vols. 2017-January.
  9. Farrugia, Patricia, Bradley A. Petrisor, Forough Farrokhyar, and Mohit Bhandari. 2010. “Research Questions, Hypotheses and Objectives.” Canadian Journal of Surgery 53(4):278–81.
  10. Foziah, N. H. M., P. L. Ghazali, M. Mamat, F. Salleh, D. A. Guci, S. A. S. Jaaffar, A. Afthanorhan, L. Omar, and A. S. Yazid. 2018. “Analysis of Private Sector Retiree’s Decision towards EPF Retirement Benefit of Annuity-Based Option.” International Journal of Engineering and Technology(UAE) 7(3.28 Special Issue 28):185–88.
  11. Hoyt, Robert E., and Ho Khang. 2000. “On the Demand for Corporate Property Insurance.” The Journal of Risk and Insurance 67(1):91–107. doi: 10.2307/253678.
  12. Kaur, Vaneet. 2019. “Research Methodology.” Pp. 77–112 in Knowledge-Based Dynamic Capabilities: The Road Ahead in Gaining Organizational Competitiveness, Innovation, Technology, and Knowledge Management, edited by V. Kaur. Cham: Springer International Publishing.
  13. Kellens, Wim, Teun Terpstra, and Philippe De Maeyer. 2013. “Perception and Communication of Flood Risks: A Systematic Review of Empirical Research.” Risk Analysis 33(1):24–49. doi: 10.1111/j.1539-6924.2012.01844.x.
  14. Kozubíková, Ludmila, Ján Dvorský, Martin Cepel, and Adam P. Balcerzak. 2017. “Important Characteristics of an Entrepreneur in Relation to Risk Taking: Czech Republic Case Study.” Journal of International Studies 10(3):220–33. doi: 10.14254/2071-8330.2017/10-3/16.
  15. MacMinn, Richard, Yayuan Ren, and Li-Ming Han. 2012. “Directors, Directors and Officers Insurance, and Corporate Governance.” Journal of Insurance Issues 35(2):159–79.
  16. Michel-Kerjan, Erwann, Paul Raschky, and Howard Kunreuther. 2011. Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks. SSRN Scholarly Paper. ID 1931174. Rochester, NY: Social Science Research Network.
  17. Ozaralli, Nurdan, and Nancy K. Rivenburgh. 2016. “Entrepreneurial Intention: Antecedents to Entrepreneurial Behavior in the U.S.A. and Turkey.” Journal of Global Entrepreneurship Research 6(1):3. doi: 10.1186/s40497-016-0047-x.
  18. Sadiq, Muhammad Nauman, and Hafiz Muhammad Ishaq. 2014. “The Effect of Demographic Factors on the Behavior of Investors during the Choice of Investment: Evidence from Twin Cities of Pakistan.” 11.
  19. Sahul Hamid, Fazelina, Gary John Rangel, Fauziah M. Taib, and Ramayah Thurasamy. 2013. “The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market.” International Journal of Banking and Finance. doi: 10.32890/ijbf2013.10.1.8471.
  20. Salleh, Fauzilah, and Mohamed Dahlan Ibrahim. n.d. “Demographic Characteristics Differences of Risk Taking Propensity among Micro and Small Business Owners in Malaysia.” 2(9):5.
  21. Salleh, Fauzilah, Mohd Haizat Khamarulzaman, Muhammad Adam Mohd Azlan, Mohamad Mustazar, Noraimatul Akidah Hamzah, and Nurul Aqmalina Zainol. n.d. “MANUFACTURER’S DEMAND FOR LIABILITY INSURANCE: A CRITICAL REVIEW.” Journal of Critical Reviews 6.
  22. Salleh, Fauzilah, and Nur Farhana Ahmad Saufi. 2020. “Is the Introduction of National Plan of Coastal Erosion Takaful Scheme Necessary?” Journal of Advanced Research in Dynamic and Control Systems Volume 12(Issue 5):47–53. doi: 10.5373/JARDCS/V12I5/20201688.
  23. Sarstedt, Marko, Joseph F. Hair, Christian M. Ringle, Kai O. Thiele, and Siegfried P. Gudergan. 2016. “Estimation Issues with PLS and CBSEM: Where the Bias Lies!” Journal of Business Research 69(10):3998–4010. doi: 10.1016/j.jbusres.2016.06.007.
  24. Sitkin, Sim B., and Amy L. Pablo. 1992. “Reconceptualizing the Determinants of Risk Behavior.” The Academy of Management Review 17(1):9–38. doi: 10.2307/258646.
  25. Zhao, Hao, Scott E. Seibert, and G. T. Lumpkin. 2009. “The Relationship of Personality to Entrepreneurial Intentions and Performance: A Meta-Analytic Review:” Journal of Management. doi: 10.1177/0149206309335187.