FACTORS INFLUENCING PERFORMANCE OF INSURANCE FIRMS IN KENYA: A CASE OF SELECTED INSURANCE FIRMS IN UASIN GISHU COUNTY

Abstract

Over the years, there has been little growth in the global penetration of insurance. For over 43 years of existence in Kenya the penetration of insurance has been modest due to a number of factors such as price, lack of understanding of insurance concepts, challenging claim processes, and the reliability of insurers. The objectives of this research were to determine the extent to which people’s culture influence the performance of insurance firms, establish how staff turnover influence the performance of insurance firms, and assess how government regulations influence the performance of insurance firms in Uasin Gishu County, Kenya. The study was grounded on open system theory, Resource-based view theory, public interest theory and theory of performance. The study adopted descriptive and correlation research designs. The target population was 49 and census approach was adopted. A pilot investigation was done to test the dependability of the measuring tool. Quantitative data was examined using both descriptive an inferential statistics whereas qualitative data was examined in an interpretive manner using patterns, features and themes under study. The null hypothesis was rejected by F-test using p-value method at 0.05.In addition to descriptive statistical analysis, inferential statistical analysis was carried out using regression and correlation models to establish the effect of independent variables on the dependent variable. From the findings R was 0.829 indicating a significant relationship between the aspects that influence the insurance firm’s performance .The R2 value was 0.629, implying that 62.9% of the performance of insurance firms could be explained by people’s culture, staff turnover and government regulations with the remaining 37.1% being variation due to other factors that have not been considered in this study. The correlation analysis findings showed a strong and significant correlation among all the independent variables and the insurance firm performance. The outcomes of the regression examination showed that there was statistical significant influence of people’s culture, staff turnover and government regulations on the performance of insurance firms. The null hypotheses was rejected when the p-value of the F test was less than 0.05. The study recommends that insurance firms should involve religious leaders in product sensitization programs. The study also recommends enhancement of employee’s terms of service and remuneration. The report additionally recommends the government to provide more tax incentives to motivate people to take insurance policies. Other prospective studies should concentrate on other facets of culture such as organizational culture and national culture. A related study could be conducted targeting wider geographical areas.