Profitability Determinants Analysis at Sharia Guarantee Company in Indonesia

Abstract

Aims: To research the internal and external factors that influence it in order to conduct an in-depth analysis of the condition of the sharia guarantee company in Indonesia and the company's management strategy in Indonesia. Study Design: Quantitative-qualitative design with data obtained from the monthly Management Reports of PT Jaminan Pembiayaan Askrindo Syariah and PT Pembiayaan Jamkrindo Syariah, Indonesian Guarantee Statistics 2014-2019. Place and Duration of Study: PT Jaminan Pembiayaan Askrindo Syariah and PT Pembiayaan Jamkrindo Syariah, Indonesian Guarantee Statistics 2014-2019. Methodology: The data is gained from four respondents of Presidents Director of PT Askrindo Syariah, Presidents of Director of PT Jamkrindo Syariah, Head of Business Department of PT Askrindo Syariah, and Head of Assurance Business Division of PT Jamkrindo Syariah. Results: From the panel data analysis, the variables that affect the company's profitability are Claim Ratio (CR), Return on Investment (ROI), Subrogation Level (SUBR), Company Size (Total Assets) and total Islamic financing carried out by Islamic Commercial Banks (LKS). Based on the results of the analysis of the relationship between internal and external factors above as well as a SWOT analysis, several strategic recommendations for the development of the sharia guarantee industry can be described, including collaboration/synergy with the parent company, business expansion, utilization of information technology, improvement of sharia guarantee product quality, strengthening of asset management functions, developing human resource capabilities, strengthening capital, building communication and seeking support from various relevant stakeholders. Conclusion: In order to be able to implement the strategy as intended and in order to increase profitability or maintain business continuity, sharia guarantee companies need the ability of managers to formulate company strategies in the form of appropriate work programs and receive support from various parties including the Government or Regulators (Financial Services Authority) and Shareholders, especially in facing challenges in the current pandemic. For academics, the authors recommend that further research is needed on sharia guarantee companies from other aspects outside of financial performance such as the amount of the multiplier effect resulting from economic growth due to sharia guarantee activities.