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Jurnal Ekonomi Malaysia

46 (2) 2012 3 – 15

Camel Rating Approach to Assess the Insurance Operators Financial Strength
Pendekatan Penarafan Camel bagi Menilai Kekuatan Kewangan Pengedali Insurans

Faculty of Economics and Management
Universiti Kebangsaan Malaysia
43600, UKM, Bangi, Selangor D.E.
MALAYSIA

rubayah@ukm.my

Prince Sultan College for Tourism and Business
Al-Faisal University,
JEDDAH

zolyus@gmail.com

Faculty of Economics and Management
Universiti Putra Malaysia
MALAYSIA

alias@econ.upm.edu.my

Faculty of Science and Technology
Universiti Kebangsaan Malaysia
43600, UKM, Bangi, Selangor D.E.
Universiti Kebangsaan Malaysia
MALAYSIA

ni@ukm.my

Abstract

This study aims at looking at the financial strength based on the CAMEL rating system for each of the conventional life insurers and takaful operators. The existing financial indicators, such as the margin of solvency (MOS), risk-based capital (RBC) and claim paying ability (CPA) rating,present their own constraints in providing information concerning the financial position of the operators to the policyholders and the public. The data used for the twenty life insurance and takaful companies operating during the period of 2003 to 2007 consists of twenty-three financial ratios. The factors (values) generated by factor analysis applied on twenty-three financial ratios reflect the five components in the CAMEL rating system. The results show that the CAMEL rating is a promising approach in providing an overview of the financial strength of the life insurer/takaful operator for the benefit of policyholders and the public.

Keywords

CAMEL rating; Factor analysis; Life insurer; Takaful operator
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Yakop, , Yusop, , radam, , & Ismail, (2012). Camel Rating Approach to Assess the Insurance Operators Financial Strength. Jurnal Ekonomi Malaysia, 46(2), 3–15.

@article{Yakop2012camel,
  title={Camel Rating Approach to Assess the Insurance Operators Financial Strength},
  author={Yakop, Rubayah and Yusop, Zulkornain and radam, alias and Ismail, Noriszura},
  journal={Jurnal Ekonomi Malaysia},
  volume={46},
  number={2},
  pages={3—15},
 

year={2012},
}

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