Financial Performance Evaluation Using the Balanced Scorecard(An Applied Study on Takaful Insurance Company)

Abstract

This study aimed to evaluate the financial performance of Takaful Insurance Company using the Balanced Scorecard (BSC) as a strategic tool. The problem stems from over-reliance on traditional financial metrics, leading to an incomplete evaluation. The study proposes the Balanced Scorecard as an integrated solution that combines financial and non-financial dimensions (customers, internal processes, learning and growth) to provide a comprehensive assessment, considering application challenges and the necessity of developing integrated evaluation models. The study seeks to answer how the Balanced Scorecard contributes to the comprehensive performance evaluation of Takaful Company, how it can be adapted for Takaful insurance companies, the company's financial performance according to the BSC dimensions, and recommendations for performance improvement. The study assumes that the Balanced Scorecard contributes to the comprehensive financial performance evaluation and aims to design a model suitable for Takaful insurance characteristics, including specialized dimensions such as Sharia compliance. The importance of the study lies in bridging the research gap in Takaful insurance, supporting the industry, and promoting social solidarity and the Islamic economy.

This study also concluded that its data is reliable and there is a strong positive perception within Takaful Insurance Company towards implementing the Balanced Scorecard as a strategic tool. The results showed a strong and direct positive correlation between the application of the Balanced Scorecard and the improvement of the company's financial performance, as the BSC significantly contributes to explaining changes in financial performance, making it the primary and pivotal driver of this performance and not merely an auxiliary factor.