Competitive Intelligence and Performance of Insurance Firms in Kenya

Abstract

Firms are currently experiencing a very competitive environment as a result of socio-economic changes, advances in technology, globalization and reduced product life cycle that have led to progressive competition. Business entities that want to survive in global markets, should continuously collect certain information that is more detailed relating to the market, a concept referred as competitive intelligence This information is assessed along with the firm’s business vision and plans to enhance further business development based on price developments, competitor strategies analysis, innovations changes, and new market orientations. Competitive intelligence is a fundamental approach for each enterprise to turn raw data into useful information, turn the useful information into a plan of action, and transform it into enterprise performance. If the firm lacks proper information, its strategy may divert from the existing market conditions. As such, the study sought to investigate the effect of competitive intelligence (CI) on the performance of insurance firms in Kenya, focusing on two key forms of CI: market intelligence and technology intelligence. The descriptive research approach was employed, and data was gathered from 53 insurance firms using a structured questionnaire. Descriptive statistics revealed that insurance firms extensively use market intelligence, including evaluating internal records, gathering competitor sales data, seeking customer feedback, and assessing market threats and opportunities. Similarly, technology intelligence is leveraged through employee skill development, investments in research and development, and the use of sophisticated software for data collection and analysis. Regression analysis confirmed that both market intelligence and technology intelligence significantly impact firm performance, with the model explaining 63.2% of the variation in performance. The analysis revealed that enhancing market intelligence by one unit resulted in a 0.389unit improvement in performance, while technology intelligence had a stronger effect, with a 0.485 unit improvement in performance. The p value was 0.00 implying that competitive intelligence is a statistically significant predictor of performance. These findings suggest that CI, both in terms of market intelligence technological intelligence plays a crucial role in improving performance in Kenya's insurance sector. The findings highlight the need for insurance firms to invest in comprehensive CI strategies to enhance their competitive edge. The recommendations include; insurance firms should strengthen their market intelligence efforts by gathering and analyzing market intelligence to understand emerging trends, customer needs, and competitor strategies. Additionally, firms should focus on improving their technological capabilities through investing in advanced data analytics tools, adopting new technologies for fraud detection, and integrating digital tools into risk management processes.