a study the macroeconomic factors affecting demand …
TRANSCRIPT
A STUDY ON THE MACROECONOMIC FACTORS AFFECTING
DEMAND FOR LIFE INSURANCE INDUSTRY IN MALAYSIA
SIT] ROSMASLINA BINTI AJAN
2005653454
BBA (HONS) FINANCE
FACULTY OF BUSINESS AND MANAGEMENT
UNIVERSITI TEKNOLOG] MARA
MACHANG CAMPUS
KELANTAN
APRIL 2007
UNIVERSITI TEKNOLOGI MARA CAWANGAN KELANTAN
BACHELOR OF BUSINESS ADMINISTRATION WITH HONOURS (FINANCE)
FACULTY OF BUSINESS ADMINISTRATION UNIVERSITI TEKNOLOGI MARA
“DECLARATION OF ORIGINAL WORK”
I, Siti Rosmaslina Binti Ajan (I/C Number: 840710-06-5258)
Hereby, declare that:
This work has not previously been accepted in substance for any degree, locally or
overseas, and is not being concurrently submined for this degree or any other degrees.
This projecl paper is the result of my independent work and invesfigation, except
where otherwise stated.
All verbatim extracts have been distinguished by quotation marks and sources of my
information have been specifically acknowledged.
Signature: ......C/
ABSTRACT
This study investigates the macroeconomic factors affecting demand for life insurance
industry in Malaysia. Because the macroeconomic factors have an imponanl influence on life business and this area has not been grmtly researched in Malaysia, this study is
undertaken to examine the demand for life insurance industry in Malaysia. This study further examines the significant relationship between income, inflation rate and price of insurance as the independent variables with the demand for life insurance industry in Malaysia as the dependent variable. All the data used are in annual basis range from the year 1972 until year 2005‘ In analyzing the data, Multiple Linear Regression Model is used, The major findings of this study indicate that income, inflation rate and price of insurance show positive insignificant relationship with the demand for life insurance industry in Malaysia. Further research is needed in this respect in order to confirm the relationship between of these three variables.
TABLE OF CONTENTS
CON'I T PAGE
DR'IARA HON ()l‘ WORK
LETTER ()l‘ '[ RANSMI'I'TAI.
ACKNOWlDGLMI—IN [' i
ABSTRACT ii
’IABLE ()FCONllzNT iii
US] UP ABBRLVIATIONS vi
[,lS'I 0F IV’\H[.|{ vii
CHAPTER 1
1.0 GENERAL INTRODUCTION 1
|.1 BACKGROUND()F’I'HES'I'UDY l
I 1.] Brief Inlruduu/ion 0/ Life Imumm'y I
1. [.2 I’urpmu qi/L/ Im'urum‘u 3
1. [.3 '[jwex Q/‘Li/c Imurum'c 3
1. H ()wrvicw rI/‘Lg'fl’ Ins'ururlcy Industry in Malaysia 5
1.2 PROBlM S'I'ATICMIYNT l)
1.3 OBJECTIVE 0]" STUDY I I
L4 SCOPE 0!" STUDY I I
15 MM] I A'I‘ION OF STUDY 12
Lil Dam ( 'al/uc/izm 12
/ 5 2 Aucumu' and Reliabilib/ of ln/iwmuliun 12
|.() 'lHllORli'I'ICALFRAMEWORK I3
1.7 STATEMENT ()FHYI’()'[‘1[ESIS 14
1.8 SI<’iI\'H"l(‘/\N'I‘OF 1'} lb STUDY IS
A Study on Ihe 'nuL ’ Factor: Aflecling Demand for Life Insurance Industry in Malaysia
1.0 GENERAL INTRODUCTION
1.1 BACKGROUND OF THE STUDY
1.1.1 Brief Introduction of Life Insurance
Life insurance relates to perils associated with human life. 1! is designed to provide
protection against two distinct risks: premature death and superannuation (living too
long). As a matter of fact, death at any age is probably premature, and superannuation
does not nonnally strike the individual as an in desirable contingency From a
practical point of View, however, one can, and sometimes does die before adequate
preparation has been made for the future financial requirements of ones‘ dependents
By the same way, a person can, and ofien does, outlive income—eaming ability. Life
insurance, endowments and annuities protect the individual and his or her dependents
against the Hm’ financial of p. death and
superannuation.
Life insurance also concemed with events that could happen during a person's life and
the probability of such an event actually taking place. The policyholder pays
premiums regularly and this ensures payment of an agreed amount if the specified
event - such as death or an accident resulting in death or disability - occurs. Premiums
collected from all the policyholders are pooled together to form the life insurance
fund, This fund is nurtured with the intention of being paid out as and when required
to the dependents of those who have contributed to iL Life insurance normally