Determinant Financial Performance of the Sharia Insurance Company

Abstract

Sharia-based economic development has been increasing significantly in Indonesia. People start to practice their financial management using the sharia principles which can be applied by both Muslims and non-Muslims. Therefore the insurance is required by the public to protect themselves in case of risk (e.g. natural disaster). Sharia insurance has a “takaful” principle which means “help each other”. The statistics from the Financial Services Authority (OJK) gained from various sharia insurance companies indicated that the Sharia life insurance contributions had been increasing significantly from 4.5% in 2019 to 10% in 2020. This study uses a quantitative research method with systematic scientific study of the parts and phenomena and the causality of their relationships. The purpose of quantitative research is to develop and use mathematical models, theories and/or hypotheses related to natural phenomena. This study uses method regression analysis. From the result we can see if contribution, liquidity, leverage, and firm size can be effect to financial performance because when up and down this is also effect to growth performance in company but only retakaful dependence cannot effect to financial performance