Competitive Strategies and Performance of Selected Insurance Companies in Nairobi City County, Kenya
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Date
2025-04
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Kenyatta University
Abstract
Kenyan insurance companies have been able to provide insurance services to array of people and businesses. The insurance industry has, however, lately been subjected to intense competition, which led to a fall in their performance and forced them to put in place procedures that can enhance their performance and effectiveness. In 2018, there was a Kes 6.3 billion loss in net profit for the Kenyan insurance sector. Therefore, this study attempts to look into the effect of competitive strategies on selected insurance firms’ performances of within City County of Nairobi, Kenya. Particularly, it sought to find out what effect differentiation, market focus, innovation strategies as well as cost leadership has on selected insurance firms’ performance in Nairobi, Kenya. Theories which provided the background in this study were Resource Dependency theory, theory of dynamic capabilities and theory of resource-based view. 194 management-level workers from the four insurance companies with headquarters located in Nairobi County, Kenya, served as the target demography. The 135 responders from the target population were specifically selected by utilizing the stratified random sampling method. A questionnaire that is well structured was the means by which primary quantitative data was obtained. Using a descriptive research approach and an insurance company document examination yielded secondary data. The questionnaire had two sections which were self-administered. The questionnaire validity was assessed with content and construct validity, while reliability was determined through internal consistency of 0.70. Following the collection of data, the researcher proceeded to carry out an analysis by the use of inferential as well as a descriptive statistic, with the findings being displayed in tables. All through the process of the research the researcher dutifully complied with ethical principles. Findings disclosed that cost leadership insignificantly and positively affected these selected insurance companies’ performances. Pertaining to the effect, the regression findings discovered that strategy of differentiation has an insignificant positive influence on performance. The regression output demonstrated that market focus strategy has an insignificant effect that is positive on performance. The regression findings found that innovative strategy has a significant effect that is positive on the selected insurance firms’ performance in Kenya’s County of Nairobi. The research recommends that insurance companies should focus on developing robust operational efficiency strategies. This could involve investing in digital transformation to streamline processes, improve customer service through technology-enabled platforms, and enhance data analytics capabilities to better understand market trends and customer needs. By shifting focus towards operational excellence and technological innovation, these companies can potentially improve their overall performance more effectively than relying solely on cost leadership strategies.
Description
A Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Business Administration in Strategic Management of Kenyatta University, April 2025.
Supervisor
1. Elishiba Murigi