Bancassurance and Profitability of Selected Commercial Banks in Kenya
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Date
2017
Authors
Kamunya, Joseph
Omagwa, Job
Journal Title
Journal ISSN
Volume Title
Publisher
Globeedu Group
Abstract
The banking sector in Kenya plays an important role in the growth of the economy, and thus this sector needs to be
stable, over the years this sector has faced challenges which have impacted on profitability of most institutions. Hence,
the sector adopted the concept of Bancassurance as a form of diversification to improve its fortunes. However, despite
the introduction of this sophisticated concept, there is very little empirical evidence on whether the concept has a
significant effect on Profitability of the banks which have largely adopted the concept. And this was the thrust of this
empirical investigation. The objective of the study was to determine the effect of bancassurance on profitability of
selected commercial banks in Kenya, between the years 2012 to 2016. Profitability was operationalized into Net income,
Return on Asset and Return on Equity. The study adopted descriptive survey method. Purposive sampling was used to
pick respondents for the study; the target population of six best commercial banks in Kenya was adopted. These were
banks offering bancassurance services. Data was analysed by descriptive statistics and multiple regression analysis. Data
presentation was in the form of tables and graphs. The study found a positive and statistically significant effect of
interest income from banc assurance, customer retention and acquisition and the risk diversification on financial
performance of selected commercial banks in Kenya. The number of insurance products on offer did not have a
statistically significant effect on profitability of the banks under study. Hence, the study concludes that Bancassurance is
a significant component of the banks revenue stream which should be given more prominence as the banks strive to
remain profitable.
Description
Research Article
Keywords
Bancassurance, Profitability, Return on Asset, Return on Equity
Citation
The International Journal Of Business & Management Vol 5 Issue 11 November, 2017