Research Paper
Year: 2022 | Month: January | Volume: 9 | Issue: 1 | Pages: 378-391
DOI: https://doi.org/10.52403/ijrr.20220145
Evaluating the Strategy to optimize the Retakaful Treaty Property Insurance: In the Perspective of the Sharia General Insurance Company in Indonesia
Iwan Hermawan, Noer Azam Achsani, Laily Dwi Asyanti
Institute Pertanian Bogor School of Business, Indonesia.
Corresponding Author: Iwan Hermawan
ABSTRACT
Purpose: This study on the potential strategy to optimize the retakaful treatyproperty insuranceof the Indonesian sharia general insurance company. Those potential strategies are the priority strategy and alternative strategy.The company can design a piority strategy to optimize the retakaful treaty contract so as to minimize problems arising from the implementation of the underwriting and claim handling.
Design/methodology/approach: Thedesign of this research is descriptive - qualitative.A survey on the reinsured’s retakaful existing strategy, retakaful treaty program, internal and external factors, the company's position and implementation ofits business process werealso conducted for this study. Several alternative strategies were obtained using Strength, Weakness, Opportunity (SWOT) analysis and the priority strategyis determined by the Quantitative Strategic Planning Matrix (QSPM) analysis.
Finding: The findings from the survey of the evaluation of reinsured’s retakaful existing strategies are: An alternative strategy obtained by using a SWOT matrix analysis, where the company's position in quadrant I with a progressive strategy. The strategy is in accordance with the results of the company's position analysis using the IE matrixwhere the company is in quadrant II in the position of Growth and build. The suitable strategy is to use intensive, forward, backward and horizontal integration. By using the QSPM, the priority strategy is that the company can design a quality retakaful treaty contract.
Research Limitation/Implications: This study is limited to Indonesian’s retakaful experience. The strategy being evaluated is the reinsured’s retakaful existing strategy. The findings are the the priority strategy and alternative strategy. The company can design a priority strategy regarding the retakaful treaty contract to optimize the treaty program.
Practical Implications: By evaluating the reinsured’s existing strategy in the retakaful treaty, the sharia general insurance company can design a quality retakaful treaty contract to optimize the treaty program. The study may also aid the researchers and regulators to discuss on the area for further development of sharia insurance industry.
Social Implications: Based on the findings and implications, it can give managerial implication to the sharia general insurance company and convince the government to speed up the other retakaful business units to spin off becoming a professional reinsurance company. So the numbers of the sharia reinsurance companies in Indonesia will increase and moreover strengthen the sharia insurance industry.
Originality/value: The insights on the respondent’s experience when explaining the internal and external factors, company’s position related to the strategy on optimizing retakaful treaty can assist the sharia generalinsurance companies to manage the risks and have a priority strategy to set up their underlying retention and get the claim recovery from the reinsurer.
Keywords: Priority Strategy, Retakaful Treaty, Property insurance, Sharia general insurance company.
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