The Effect of Intellectual Capital on the Financial Performance of Islamic and Conventional Life Insurance Companies in GCC and ASEAN

Abstract

The objective of this study is to examine the association of intellectual capital with the financial performance of Islamic and conventional life insurance companies in the regions of the GCC and ASEAN. The study conducts an analysis to assess the association between intellectual capital, assessed explicitly by the value-added intellectual coefficient (VAIC) using Ordinary Least-Square Regression, and the financial performance of life insurance in the GCC and ASEAN through the panel analysis encompassing 4 GCC countries and 2 ASEAN, which encompasses of 26 conventional and 24 Islamic life insurance covering 2017-2021 period. The findings indicate a distinction between conventional and Islamic life insurance companies. The impact of intellectual capital in the context of conventional life insurance on financial performance is only affected by Capital Employed Efficiency. Conversely, financial performance is significantly affected by the intellectual capital elements of Islamic life insurance, except structural capital. Despite varying outcomes, conventional and Islamic life insurance correlation demonstrates a noteworthy impact of intellectual capital, except for structural capital, on financial performance.