Management Capability and Sustainability of Kenya’s Insurance Companies

Abstract

Purpose: The study explored how management capability influences sustainability of insurance companies in Kenya. Study Methodology: The study adopted the positivist research philosophy and employed a descriptive research design. The target population of the study was the 51 insurance companies as registered by the Insurance Regulatory Authority of Kenya as at 31st December 2016. The study took a proportionate sample of 30 companies from 10 life assurance companies, 15 from those conducting general insurance business and 5 from those performing both life and general business as composite companies. The primary data collection was through a structured questionnaire with closed questions. A pilot study was carried out before questionnaire distribution, which ensured the research instrument validity and reliability, before distribution through both hand delivery and email, followed by a telephone call to the respondents and a research assistant later visiting the respondents to collect the filled questionnaires, while secondary data was collected using data collection sheets. The raw data was cleaned, edited, coded and analyzed using SPSS analytical tool to generate descriptive and inferential statistics. The study performed data analysis using multiple regressions to determine the relationship of the independent variable to the dependent variable. Using descriptive statistics such as the mean, standard deviation and frequencies the data was analyzed. Further, the study applied inferential statistics such as the ANOVA and the T-test. The Study Findings: The findings of the study were that management capability has a positive and significant effect on sustainability of Kenya’s insurance companies. In conclusion, the slogan of people being companies’ most valued asset should not just be mentioned in passing in employee-management and board meetings, but must be practiced across the company. Unique Contribution: The Kenyan insurance companies should review their operating organizational structures so that the mix of employees in the middle management, senior management and junior staff is adjusted to achieve an efficient and effective structure to enhance customer experience, as this is critical and is a significant cost driver in the management cost structure of an insurance company. There should be more staff assigned to operations that is policy administration, renewal retention units, customer service and claims management. Specialists and management should be few and either internal staff or outsourced services. In conclusion insurance companies should ensure embedment of their recruitment, hiring, training and development policies in their business processes.