Influence of Strategic Partnerships on Performance of Insurance Companies in Kenya

Abstract

Strategic partnerships are arrangements between two companies to work together, to make it easier for each of them to achieve their objectives. They offer a middle ground enabling organizations to attain some purely in-house options. Strategic partnerships are increasingly becoming popular in the business world in a bid to gain competitive advantage; firms combine their assets and capabilities to achieve this. Meaningful partnerships are the foundation for success. They allow companies to share the risk and resources required to dominate a specific market. They give a company a degree of flexibility not afforded by doing business on their own. To offer quality and achieve competitiveness; insurance companies have embraced strategic partnership. This study sought to establish the influence of strategic partnerships on the performance of insurance companies. This research was conducted through a survey study targeting operation managers for the 51 insurance companies licensed by IRA to operate in Kenya. The study collected primary data by use of a questionnaire. Data collected was analyzed through descriptive statistics, multiple linear regressions was undertaken with a view of examining the cumulative effect of the independent variables (Strategic partnerships and effectiveness of strategic partnerships) on the dependent variable (Organizational performance). Strategic partnerships contributed towards organizational performance of the insurance firms in Kenya. Higher profitability, wider distribution of insurance products, higher retention rates of customers were some outcomes identified as a result of the partnerships between insurance companies and various partners. The results concluded that there is a positive influence of each independent variable on dependent variable with the other independent variables held constant