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THE IMPACT OF THE INDUSTRIAL REVOLUTION 4.0 ON THE INSURANCE INDUSTRY AND WHETHER OF THE ASSETS AND INVESTMENTS PLAY A ROLE TO INVESTMENT YIELD?
Corresponding Author(s) : Iskandar Muda
Humanities & Social Sciences Reviews,
Vol. 8 No. 2 (2020): March
Abstract
Purpose of the study: This research aims to know the influence of the Industrial Revolution 4.0 era on the insurance industry on the side of assets and Investment insurance companies to Investment Yield Sharia Insurance in Indonesia.
Methodology: This type of research is explanatory research. This type of research data is secondary data sourced from the Financial Services Authority (OJK) Republic of Indonesia period in 2016-2107. The tool of analysis in this research is the Partial Least Square method using Smart PLS statistics.
Main Findings: The results are an influence of Assets and Investment on Investment Yield on insurance companies in the Industrial Revolution 4.0 era. In the era of the industrial revolution, 4.0 potential insurance improve economic growth through several aspects, namely promote financial stability. Facilitate trade and commercial activities. mobilize domestic savings. Offering a variety of risk management on capital. Increase more efficient allocation of capital and reduce the risk of loss and can increase Investment Yield for shareholders and stakeholders.
Applications of this study: This research is the observation only on Sharia Insurance Company sample while other issuers are not observed in this study and this research implies that sharia insurance issuers are growing and contributing to their shareholders and shareholder.
Novelty/Originality of this study: The first time observing the Sharia Insurance industry industrial Revolution 4.0 era and previous research to observe in Sharia banking.
Keywords
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- Abdulkader. T, Cox. S, & Kraty. B. (2005). Structuring Islamic finance transitions. Euromoney Institutional Investor PLC.
- Ahmed, A. (2010). Global financial crisis: An Islamic finance perspective. International Journal of Islamic and Middle Eastern Finance and Management, 3(4), 306–320. https://doi.org/10.1108/17538391011093252 DOI: https://doi.org/10.1108/17538391011093252
- Ahroum, R., Ahroum, R., Achchab, B., &Achchab, B. (2017). Pricing of SukukMusharakah with joint venture as underlying, beyond the use of PLS ratio. Journal of Islamic Accounting and Business Research, 8(4),406-419. https://doi.org/10.1108/JIABR-03-2016-0036 DOI: https://doi.org/10.1108/JIABR-03-2016-0036
- Albu, A., Clim, F. C., &Albu, M. S. (2019). The Fourth Industrial Revolution Is Here. Is European Union Prepared To Adopt IT?. Ecoforum Journal, 8(1), 34-45. https://doi.org/10.1108/eco-for04-2019-0018 .
- Bohnert, A., Fritzsche, A., & Gregor, S. (2019). Digital agendas in the insurance industry: the importance of comprehensive approaches. The Geneva Papers on Risk and Insurance-Issues and Practice, 44(1), 1-19. https://doi.org/10.1057/s41288-018-0109-0 DOI: https://doi.org/10.1057/s41288-018-0109-0
- Carrozza, M. C. (2019). Are We Going Through a Real Revolution?.In The Robot and Us (pp. 1-11). Springer, Cham. https://doi.org/10.1007/978-3-319-97767-6_1 DOI: https://doi.org/10.1007/978-3-319-97767-6_1
- Chen, S., & Li, G. (2020). Time-inconsistent preferences, consumption, investment and life insurance decisions. Applied Economics Letters, 27(5), 392-399. https://doi.org/10.1080/13504851.2019.1617395 DOI: https://doi.org/10.1080/13504851.2019.1617395
- Cotter, Julie and Scott Richardson, (2002). Reliability of Asset Revaluations: The Impact of Appraiser Independenceâ€, Review of Accounting Studies. 7(4), 435-442. h https://doi.org/10.1023/A:1020763612369 DOI: https://doi.org/10.1023/A:1020763612369
- Das, R.C., Mishra, C.S., &Rajib, P. (2016). Does Earnings Management Reveal Firm Specific Information? A Study in the Indian Context. South Asian Journal of Management. 4(23), 124-137. https://doi.org/10.1105/sajm01-2016-0009
- Davison, S and Yasuba, Y (1960). Asset Revaluation and Income Taxation in Japan. National Tax Journal, 13(1), 45-59. https://doi.org/10.1105/jstor.org/stable/41790791 DOI: https://doi.org/10.1086/NTJ41790791
- Demski, Joel S., Haijin Lin, David E. M. Sappington, (2008). Asset Revaluation Regulation with Multiple Information Sources, The Accounting Review. 83(4), 869-879. https://doi.org/10.2308/accr.2008.83.4.869 DOI: https://doi.org/10.2308/accr.2008.83.4.869
- El-Gamal, M. (2006). Islamic finance: Law, economics, and practice. Cambridge University Press. Cambridge, U.K. https://doi.org/10.1017/CBO9780511753756 DOI: https://doi.org/10.1017/CBO9780511753756
- Guambe, C., & Kufakunesu, R. (2020). Optimal investment-consumption and life insurance with capital constraints. Communications in Statistics-Theory and Methods, 49(3), 648-669. https://doi.org/10.1080/03610926.2018.1549246 DOI: https://doi.org/10.1080/03610926.2018.1549246
- Hemrit, W. (2020),Determinants driving Takaful and cooperative insurance financial performance in Saudi Arabia, Journal of Accounting & Organizational Change, 20(2). 67-79. https://doi.org/10.1108/JAOC-03-2019-0039 DOI: https://doi.org/10.1108/JAOC-03-2019-0039
- Hisamatsu, R., Tabeta, S., Kim, S., & Mizuno, K. (2020). Storm surge risk assessment for the insurance system: A case study in Tokyo Bay, Japan. Ocean & Coastal Management, 189, 105147. https://doi.org/10.1016/j.ocecoaman.2020.105147 DOI: https://doi.org/10.1016/j.ocecoaman.2020.105147
- Inyiama, O. I., & Helen, U. (2015). Interactions between Earnings and Dividend Payout Rate in the Oil and Gas Sector: Evidence from Nigeria (2004-2014). International Journal of Finance and Accounting, 4(5), 253-261.
- Janssens, J. (2019). Managing Customer Journeys in a Nimble Way for Industry 4.0. In Agile Approaches for Successfully Managing and Executing Projects in the Fourth Industrial Revolution (pp. 141-164). IGI Global. https://doi.org/10.4018/978-1-5225-7865-9.ch008 DOI: https://doi.org/10.4018/978-1-5225-7865-9.ch008
- Lim, H.K., How, H.Y., Liew, S.Y., Chye, K.Y., & Sarah, A.P. (2016). The Investment Return of Real Estate Industry to Investors: A Study based in Malaysia (Doctoral dissertation, UTAR).Kuala Lumpur.
- Mtunya, A.P., Ngare, P., &Nkansah-Gyekye, Y. (2017). Steady dividend payment and investment financing strategy: a functional mean reversion speed approach. Journal of Mathematical and Computational Science, 7(4), 677-698.
- Muda, I., Panjaitan, S.R, Erlina, S. Ginting, A. Maksum and E. Abubakar. (2018a). Model application of Murabahah financing acknowledgement statement of Sharia accounting standard No 59 Year 2002. IOP Conference Series: Earth and Environmental Science. 2018. 126. https://doi.org/10.1088/1755-1315/126/1/012071 DOI: https://doi.org/10.1088/1755-1315/126/1/012071
- Muda, I; M. Weldi; Siregar, H.S, & Indra, N. (2018b). The Analysis of Effects of Good Corporate Governance on Earnings Management in Indonesia with Panel Data Approach. Iranian Economic Review. 22(2), 657-669.
- Muneeza, A., Fauzi, M., Bin Mat Nor, M., Abideen, M. and Ajroudi, M. (2020),House financing: contracts used by Islamic banks for finished properties in Malaysia, Journal of Islamic Accounting and Business Research, 11(1), 168-178. https://doi.org/10.1108/JIABR-04-2017-0057 DOI: https://doi.org/10.1108/JIABR-04-2017-0057
- Murphy, Elizabeth and Keith Gunter, (2008). Real Tax Savings in Real Estate. Journal of Accountancy.205(2), 68-79.
- Ng’ang’a,K.(2014). The Relationship between Dividends and Firm’s Performance: A Case Study of Listed Firms in the Nairobi Securities Exchange for the Period 2006-2012. Doctoral dissertation, United States International University-Africa).
- Nguyen, T., Nguyen, H., Tran, Q., & Le, Q. (2020). Dividend policy and share price volatility: empirical evidence from Vietnam. Accounting, 6(2), 67-78. https://doi.org/10.5267/j.ac.2019.12.006 DOI: https://doi.org/10.5267/j.ac.2019.12.006
- Ong, A.S.K., Lim, A. S., Lim, M.Y., Ow, Y.P.Y., & Tan, L.L. (2014). The impact of dividend policy on shareholders' wealth: evidence on Malaysia's listed food producer sector. Doctoral dissertation, UTAR.
- Paavola, J., & Primmer, E. (2019). Governing the provision of insurance value from ecosystems. Ecological Economics, 164, 106346. https://doi.org/10.1016/j.ecolecon.2019.06.001 DOI: https://doi.org/10.1016/j.ecolecon.2019.06.001
- Rogaleva, I., Bobkov, A., &Savchina, O. (2019). Problems of the registration of labor relations in conditions of the economic model of the Fourth Industrial Revolution. In 2nd International Scientific conference on New Industrialization: Global, national, regional dimension (SICNI 2018). Atlantis Press. https://doi.org/10.2991/sicni-18.2019.47 DOI: https://doi.org/10.2991/sicni-18.2019.47
- Saad, N. M., Haniff, M. N., & Ali, N. (2019). Corporate governance mechanisms with conventional bonds and Sukuk’yield spreads. Pacific-Basin Finance Journal, 101116. 139-155. https://doi.org/10.1016/j.pacfin.2019.02.001 DOI: https://doi.org/10.1016/j.pacfin.2019.02.001
- Wilkie, A., & Åžahin, Åž. (2020). Yet more on a stochastic economic model: Supplement to Part 4: A model for share earnings, dividends and prices. Annals of Actuarial Science, 14(1),138-149. https://doi.org/10.1017/S1748499519000095 DOI: https://doi.org/10.1017/S1748499519000095
- Yee, J.M., Lee, L.F., Ng, W. K., Tan, C.H., & Tan, J.S. (2017). Managerial Confidence Level and Dividend Policy: Evidence from ASEAN Developing Countries. Doctoral dissertation, UTAR.
- Yousaf, Z., Majid, A., & Yasir, M. (2014). An Investigation Into the Oil and Gas Sector of Pakistan to Analyze the Fluctuation of the Determinants of Dividend. Journal of Accounting, Finance & Management Strategy, 9(2), 43-56.
References
Abdulkader. T, Cox. S, & Kraty. B. (2005). Structuring Islamic finance transitions. Euromoney Institutional Investor PLC.
Ahmed, A. (2010). Global financial crisis: An Islamic finance perspective. International Journal of Islamic and Middle Eastern Finance and Management, 3(4), 306–320. https://doi.org/10.1108/17538391011093252 DOI: https://doi.org/10.1108/17538391011093252
Ahroum, R., Ahroum, R., Achchab, B., &Achchab, B. (2017). Pricing of SukukMusharakah with joint venture as underlying, beyond the use of PLS ratio. Journal of Islamic Accounting and Business Research, 8(4),406-419. https://doi.org/10.1108/JIABR-03-2016-0036 DOI: https://doi.org/10.1108/JIABR-03-2016-0036
Albu, A., Clim, F. C., &Albu, M. S. (2019). The Fourth Industrial Revolution Is Here. Is European Union Prepared To Adopt IT?. Ecoforum Journal, 8(1), 34-45. https://doi.org/10.1108/eco-for04-2019-0018 .
Bohnert, A., Fritzsche, A., & Gregor, S. (2019). Digital agendas in the insurance industry: the importance of comprehensive approaches. The Geneva Papers on Risk and Insurance-Issues and Practice, 44(1), 1-19. https://doi.org/10.1057/s41288-018-0109-0 DOI: https://doi.org/10.1057/s41288-018-0109-0
Carrozza, M. C. (2019). Are We Going Through a Real Revolution?.In The Robot and Us (pp. 1-11). Springer, Cham. https://doi.org/10.1007/978-3-319-97767-6_1 DOI: https://doi.org/10.1007/978-3-319-97767-6_1
Chen, S., & Li, G. (2020). Time-inconsistent preferences, consumption, investment and life insurance decisions. Applied Economics Letters, 27(5), 392-399. https://doi.org/10.1080/13504851.2019.1617395 DOI: https://doi.org/10.1080/13504851.2019.1617395
Cotter, Julie and Scott Richardson, (2002). Reliability of Asset Revaluations: The Impact of Appraiser Independenceâ€, Review of Accounting Studies. 7(4), 435-442. h https://doi.org/10.1023/A:1020763612369 DOI: https://doi.org/10.1023/A:1020763612369
Das, R.C., Mishra, C.S., &Rajib, P. (2016). Does Earnings Management Reveal Firm Specific Information? A Study in the Indian Context. South Asian Journal of Management. 4(23), 124-137. https://doi.org/10.1105/sajm01-2016-0009
Davison, S and Yasuba, Y (1960). Asset Revaluation and Income Taxation in Japan. National Tax Journal, 13(1), 45-59. https://doi.org/10.1105/jstor.org/stable/41790791 DOI: https://doi.org/10.1086/NTJ41790791
Demski, Joel S., Haijin Lin, David E. M. Sappington, (2008). Asset Revaluation Regulation with Multiple Information Sources, The Accounting Review. 83(4), 869-879. https://doi.org/10.2308/accr.2008.83.4.869 DOI: https://doi.org/10.2308/accr.2008.83.4.869
El-Gamal, M. (2006). Islamic finance: Law, economics, and practice. Cambridge University Press. Cambridge, U.K. https://doi.org/10.1017/CBO9780511753756 DOI: https://doi.org/10.1017/CBO9780511753756
Guambe, C., & Kufakunesu, R. (2020). Optimal investment-consumption and life insurance with capital constraints. Communications in Statistics-Theory and Methods, 49(3), 648-669. https://doi.org/10.1080/03610926.2018.1549246 DOI: https://doi.org/10.1080/03610926.2018.1549246
Hemrit, W. (2020),Determinants driving Takaful and cooperative insurance financial performance in Saudi Arabia, Journal of Accounting & Organizational Change, 20(2). 67-79. https://doi.org/10.1108/JAOC-03-2019-0039 DOI: https://doi.org/10.1108/JAOC-03-2019-0039
Hisamatsu, R., Tabeta, S., Kim, S., & Mizuno, K. (2020). Storm surge risk assessment for the insurance system: A case study in Tokyo Bay, Japan. Ocean & Coastal Management, 189, 105147. https://doi.org/10.1016/j.ocecoaman.2020.105147 DOI: https://doi.org/10.1016/j.ocecoaman.2020.105147
Inyiama, O. I., & Helen, U. (2015). Interactions between Earnings and Dividend Payout Rate in the Oil and Gas Sector: Evidence from Nigeria (2004-2014). International Journal of Finance and Accounting, 4(5), 253-261.
Janssens, J. (2019). Managing Customer Journeys in a Nimble Way for Industry 4.0. In Agile Approaches for Successfully Managing and Executing Projects in the Fourth Industrial Revolution (pp. 141-164). IGI Global. https://doi.org/10.4018/978-1-5225-7865-9.ch008 DOI: https://doi.org/10.4018/978-1-5225-7865-9.ch008
Lim, H.K., How, H.Y., Liew, S.Y., Chye, K.Y., & Sarah, A.P. (2016). The Investment Return of Real Estate Industry to Investors: A Study based in Malaysia (Doctoral dissertation, UTAR).Kuala Lumpur.
Mtunya, A.P., Ngare, P., &Nkansah-Gyekye, Y. (2017). Steady dividend payment and investment financing strategy: a functional mean reversion speed approach. Journal of Mathematical and Computational Science, 7(4), 677-698.
Muda, I., Panjaitan, S.R, Erlina, S. Ginting, A. Maksum and E. Abubakar. (2018a). Model application of Murabahah financing acknowledgement statement of Sharia accounting standard No 59 Year 2002. IOP Conference Series: Earth and Environmental Science. 2018. 126. https://doi.org/10.1088/1755-1315/126/1/012071 DOI: https://doi.org/10.1088/1755-1315/126/1/012071
Muda, I; M. Weldi; Siregar, H.S, & Indra, N. (2018b). The Analysis of Effects of Good Corporate Governance on Earnings Management in Indonesia with Panel Data Approach. Iranian Economic Review. 22(2), 657-669.
Muneeza, A., Fauzi, M., Bin Mat Nor, M., Abideen, M. and Ajroudi, M. (2020),House financing: contracts used by Islamic banks for finished properties in Malaysia, Journal of Islamic Accounting and Business Research, 11(1), 168-178. https://doi.org/10.1108/JIABR-04-2017-0057 DOI: https://doi.org/10.1108/JIABR-04-2017-0057
Murphy, Elizabeth and Keith Gunter, (2008). Real Tax Savings in Real Estate. Journal of Accountancy.205(2), 68-79.
Ng’ang’a,K.(2014). The Relationship between Dividends and Firm’s Performance: A Case Study of Listed Firms in the Nairobi Securities Exchange for the Period 2006-2012. Doctoral dissertation, United States International University-Africa).
Nguyen, T., Nguyen, H., Tran, Q., & Le, Q. (2020). Dividend policy and share price volatility: empirical evidence from Vietnam. Accounting, 6(2), 67-78. https://doi.org/10.5267/j.ac.2019.12.006 DOI: https://doi.org/10.5267/j.ac.2019.12.006
Ong, A.S.K., Lim, A. S., Lim, M.Y., Ow, Y.P.Y., & Tan, L.L. (2014). The impact of dividend policy on shareholders' wealth: evidence on Malaysia's listed food producer sector. Doctoral dissertation, UTAR.
Paavola, J., & Primmer, E. (2019). Governing the provision of insurance value from ecosystems. Ecological Economics, 164, 106346. https://doi.org/10.1016/j.ecolecon.2019.06.001 DOI: https://doi.org/10.1016/j.ecolecon.2019.06.001
Rogaleva, I., Bobkov, A., &Savchina, O. (2019). Problems of the registration of labor relations in conditions of the economic model of the Fourth Industrial Revolution. In 2nd International Scientific conference on New Industrialization: Global, national, regional dimension (SICNI 2018). Atlantis Press. https://doi.org/10.2991/sicni-18.2019.47 DOI: https://doi.org/10.2991/sicni-18.2019.47
Saad, N. M., Haniff, M. N., & Ali, N. (2019). Corporate governance mechanisms with conventional bonds and Sukuk’yield spreads. Pacific-Basin Finance Journal, 101116. 139-155. https://doi.org/10.1016/j.pacfin.2019.02.001 DOI: https://doi.org/10.1016/j.pacfin.2019.02.001
Wilkie, A., & Åžahin, Åž. (2020). Yet more on a stochastic economic model: Supplement to Part 4: A model for share earnings, dividends and prices. Annals of Actuarial Science, 14(1),138-149. https://doi.org/10.1017/S1748499519000095 DOI: https://doi.org/10.1017/S1748499519000095
Yee, J.M., Lee, L.F., Ng, W. K., Tan, C.H., & Tan, J.S. (2017). Managerial Confidence Level and Dividend Policy: Evidence from ASEAN Developing Countries. Doctoral dissertation, UTAR.
Yousaf, Z., Majid, A., & Yasir, M. (2014). An Investigation Into the Oil and Gas Sector of Pakistan to Analyze the Fluctuation of the Determinants of Dividend. Journal of Accounting, Finance & Management Strategy, 9(2), 43-56.