Strategy Evaluation and Performance of Insurance Firms in Kenya

Abstract

The insurance industry, being a cornerstone of financial sectors globally, has experienced a myriad of changes in recent years, especially in emerging markets like Kenya. Navigating through an evolving landscape requires insurance firms to adopt robust strategies to maintain growth and sustainability. The primary objective of this study was to ascertain the influence of strategy evaluation, specifically in terms of risk mitigation, resource accountability, and learning processes, on the performance of insurance firms in Kenya, using the balanced scorecard as a measure of performance. The study was anchored on the growth of the firm theory supported by resource based view theory. The population of the study was 54 insurance firms in Kenya as at December 2022. Employing a descriptive cross-sectional research design, the response rate was 88.9% which was considered adequate. Data collection relied exclusively on primary data procured through structured questionnaires. The collected data was subsequently analyzed using descriptive, correlational, and regression methodologies. The regression results revealed a significant effect of the selected independent variables on organizational performance. Learning processes emerged as the most potent predictor, followed by resource accountability, and risk mitigation. The model illustrated that approximately 92.3% of the variance in organization performance could be elucidated by these independent variables. The study concluded that there is a robust association between organizational performance and the practices of risk mitigation, resource accountability, and learning processes. Particularly, the emphasis on continuous learning and adaptability emerged as a critical determinant of success in the insurance sector. The study recommends the need for insurance firms to enhance their risk management frameworks through regular reviews and employee training programs. The study also recommends the need to adopt comprehensive resource management policies and backed by regular audits. Further, insurance firms should prioritize investments in continuous learning initiatives, such as training programs and feedback mechanisms, to foster a culture of innovation and growth. Future studies should investigate the effect of strategy evaluation on performance of firms in other contexts. Incorporating qualitative research methods, like in-depth interviews, could also provide richer, more nuanced insights.