Firm Characteristics and Revenue Efficiency of Selected Insurance Companies in Kenya

Simple item page
dc.contributor.authorNalimae, Sylvia Nanjala
dc.date.accessioned2021-02-17T08:19:15Z
dc.date.available2021-02-17T08:19:15Z
dc.date.issued2020-10
dc.descriptionA Research Thesis Submitted to the Schoolof Business in Partial Fulfilment of the Requirements for the Award of Master of Science Degree (Finance) of Kenyatta University, October, 2020en_US
dc.description.abstractRevenue efficiency is recognized as a major ingredient in sustainable growth in insurance business. The growing complexity in the insurance business characterized by the constant change in the operating environment has increased the significance of the effect of revenue efficiency in resource utilization in the sector. The continuous decline in revenue efficiency in the Kenyan insurance has affected profitability and sustainability of insurance companies. The main objective of this study was to determine the effect of firm characteristics on revenue efficiency of selected insurance companies in Kenya. The specific objectives of the study included: to determine the effect of firm size on revenue efficiency, to establish the effect of capital adequacy on revenue efficiency, to determine the effect of claims experience on revenue efficiency of insurance companies, to establish the effect of asset quality on revenue efficiency, to assess the effect of risk on revenue efficiency, to determine the moderating effect of competition on the relationship between firm characteristics and revenue efficiency. The research was based on the information asymmetry theory, the agency theory, passive learning theory and the structural conduct theory. The study used a causal research design and was underpinned on positivism research philosophy. The target population was the 27 insurance companies that have consistently been in operation during the study period, 2008-2017 and registered by the Insurance Regulatory Authority. A census of all the 27 insurance companies was taken. The study relied on secondary data from audited financial statements as submitted to the Insurance Regulatory Authority. The panel secondary data was quantitative in nature and was analyzed using descriptive statistics and inferential statistics. Descriptive statistics included mean, mode, median and standard deviations. Inferential statistics included correlation analysis and multivariate analysis using the two stage Data Envelopment Analysis by obtaining efficiency scores in the first stage thereafter Dynamic panel regression model in stage two. Data was analyzed by STATA (14). The research findings showed that capital adequacy had a positive statistically significant effect on revenue efficiency of insurance companies in Kenya, firm size and asset quality had a statistically significant negative effect on revenue efficiency; claims experience and risk did not have a significant effect on revenue efficiency. The moderating effect of competition on the relationship between: capital adequacy and revenue efficiency; claims experience and revenue efficiency was negative and statistically significant; the moderating effect of competition on the relationship between: Asset Quality and Revenue Efficiency, Firm Size and Revenue Efficiency, risk and Revenue Efficiency was not significant. The study recommends that insurance companies should put in place robust measures to ensure remittance of policy premiums especially from insurance agents, to reduce exposure to large sizes of debtors consequently poor asset quality. The study also recommends that insurance companies should be encouraged to form strategic business units through spin-offs, which will encourage specialization for the different units reducing the too-big-to-fail phenomenon.en_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/21508
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectRevenue Efficiencyen_US
dc.subjectInsurance Companiesen_US
dc.subjectKenyaen_US
dc.titleFirm Characteristics and Revenue Efficiency of Selected Insurance Companies in Kenyaen_US
dc.typeThesisen_US
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
Firm Characteristics and Revenue Efficiency of Selected.....pdf
Size:
1.36 MB
Format:
Adobe Portable Document Format
Description:
Full Text Thesis
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Item-specific license agreed upon to submission
Description:
Download
Collections
MST-Department of Accounting and Finance