Determinants of the Performance of Window Takaful Companies : A Study of Pakistan

This study examines the performance of window takaful (i.e. Sharī’ah complaint Insurance financial instrument) companies with specific reference to the insurance companies in Pakistan. Security & Exchange Commission of Pakistan has allowed conventional insurance companies to start window takaful operations in Pakistan. Using the data from 2010 to 2019 of top ten insurance companies, five from General and Life insurance, listed in SECP has been selected for analysis. Descriptive statistics has been employed to analyses the financial performance of insurance companies before and after starting takaful operations, in an event window setting. The results derived from statistical analysis are mixed showing that ROE and ROA, of insurance companies have not significantly improved after introduction of window takaful business (General & Life). However, results based on EPS are contrary to ROE and ROA i.e. EPS is higher after introducing the takaful business. This conclusion is of prime importance to policy makers, practitioners and academia in devising policy guidelines with respect to takaful operations