Zuriah Abdul Rahman - Associate Professor, Faculty of Business Management, Universiti Teknologi MARA
Rosylin Mohd.Yusof - Assistant Professor, Kulliyah of Economics, International Islamic University.
M. Shabri Abdul Majid - Assistant Professor, Kulliyah of Economics,International Islamic University.

The current research seeks to investigate whether there exist any relationship between the macro economic variables and the demand for family takaful (Islamic life insurance) in Malaysia measured by the economic indicators. In line with the government’s policy to promote Malaysia as an international hub for Islamic banking and finance, the dynamic effects of goods, money and securities markets on the development of family takaful in the country during the period from 1999:Q1 to 2006:Q4 are empirically examined. The main objectives of the study are twofold. Firstly, it seeks to explore the short- and longrun dynamics between takaful performances (number of certificates and contributions) and three markets, i.e., the goods market, the money market, and the securities market. Secondly, it also attempts to examine the causalities among the three markets in promoting family takaful performances. The findings of the study indicate that among the three markets studied, the goods & money markets in Malaysia are the most significant market in promoting family takaful in the country. This implies that to a certain extent, the government’s effort in promoting Malaysia as the international hub for the Islamic capital market has been successful, thus far. However, further efforts need to be enhanced in promoting Malaysia as the International hub for the Islamic banking, finance and takaful.