Abstract: The study sought to determine critical factors influencing the financial performance of insurance companies in Kenya. The specific study objectives included: to evaluate the influence of the innovations strategies on financial performance of insurance companies in Kenya, to evaluate the influence of the leadership strategies on financial performance of insurance companies in Kenya, to assess the influence of insurance agent support strategies on the financial performance of insurance companies in Kenya and to investigate the influence of the human resource management strategies on financial performance of insurance companies in Kenya. The study followed descriptive research design and tested the hypothesis through deductive approach. The target populations were the 52 registered insurance companies in Kenya. Since the study targeted three respondents each from each insurance firm’s HR, marketing and Finance departments, the target respondents were 156. Purposive sampling was used as the sampling strategy in order to select appropriate respondents based on their knowledge of the subject under investigation. The data was analyzed using SPSS. The analysis used descriptive statistics such as mean, median, mode and skewness statistics as well as Pearson correlation matrix and regression analysis to obtain R and R-Squared together with other statistics such as coefficients and significant values. According to correlation results, the variables exhibit a moderately strong positive correlation with each other. According to the regression results, R was 0.829 while the R-Squared was 0.687 which indicate that the relationship is moderately strong and positive. The significant values for the measures for: Innovation Strategies (0.00), Leadership Strategies (0.205), Agent Support Strategies (0.00), and Human Resource Strategies (0.00) show that all the analyzed factors have statistically significant effect on financial performance of the insurance firms in Kenya at 5 percent significant level apart from the leadership strategies whose significant value was 0.205 indicating that it did not significantly influence financial performance of the insurance firms. According to the model coefficients, all the coefficients have a positive effect on financial performance apart from the innovation strategies which had a negative coefficient. The study concludes that the innovation strategies adopted by insurance firms in Kenya have a negative statistically significant effect on financial performance at 5 percent level of significant. Further, the study concludes that the adopted leadership strategies have a positive statistically insignificant effect on financial performance of firms. On the other hand, the study concludes that agent support strategies and human resource strategies implemented by the insurance companies in Kenya, individually, have a positive statistically significant influence on financial performance of the firms. The study recommends that insurance firms in Kenya should aim to build strong customer relationships and trust with customers rather than just investing in new products and innovation. Also, the study recommends that the firms should embrace transformational and democratic leadership strategies coupled with spirited insurance agent support strategies because the agents have close contact with customers and can provide support and provide relevant information to grow the organization. In addition, insurance firms should adopt effective human resource management strategies such as adequate and relevant training and development of personnel, attractive remunerations, provision of career growth opportunities and promoting employee voice in the organization can help to enhance insurance firm performance. To the regulator of the insurance industry, the study recommends that they should support the sector adequately and help them to improve their leaderships and management practices for a healthy insurance sector. Future studies can be conducted through the use of mixed methods whereby interviews are used to obtain more depth to support the quantitative survey methods results.
Keywords: Innovation, Insurance agent support, Leadership, Organizational financial performance, Human resource management, Insurance Operation.
Title: CRITICAL FACTORS INFLUENCING THE FINANCIAL PERFORMANCE OF INSURANCE COMPANIES IN KENYA
Author: SESSAROD MUGAMBI, Dr. Mwanzia Mary
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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