The Determinants of Financial Performance of Life Assurance Companies in Kenya

Abstract

The objective of the study was to establish the determinants of the financial performance of life assurance companies in Kenya. The study applied a descriptive design. The population comprised of 23 insurance companies which included insurance companies transacting long-term business. These included 14 composite insurance companies and 9 insurance companies transacting life business only. Both primary and secondary data were used. Primary data was collected using a semi structured questionnaire with both open and closed ended questions. The collected data was entered into Statistical Package for Social Sciences (SPSS) version 19 for analysis. The variables of the study comprised the capital structure, organization culture, innovation and ownership structure of the long term insurance companies. The data findings were presented in the form of tables. The study established that capital structure affected the performance of life insurance companies because it affects the financial costs and burdens of a company. Organization culture affected organization performance because it affected they way employees conducted themselves. The study concluded that capital structure, innovation and ownership structure are determinants of financial performance.