Risk Management Strategies and Performance of Selected Insurance Companies in Nairobi City County, Kenya

Authors

  • Everlyne Engefu Agola Author
  • Dr. Priscilla Ndegwa Author

DOI:

https://doi.org/10.35942/bnkj9p70

Abstract

The insurance industry plays a vital role in the management of risk and therefore helps to support and facilitate business activities. The performance of insurance companies is impacted by various challenges related to their risk management strategies. These challenges can arise from both internal and external factors, and they can have significant implications for the financial stability and profitability of insurance companies. Changes in regulatory requirements can impact the risk management strategies of insurance companies, requiring them to adapt their practices and systems to remain compliant. Therefore, this study seeks to investigate the influence of risk management strategies on the performance of selected insurance companies in Nairobi City County, Kenya. The study was guided by the balanced scorecard model, agency theory, portfolio theory, risk aversion theory, and prospect theory. A descriptive research design was employed. The study targeted 95 respondents, comprising 10 senior-level managers, 30 middle-level managers, and 55 departmental heads from the insurance companies operating in Kenya. A census of 95 respondents was conducted. The study used a structured questionnaire. A pilot group of 9 individuals was selected from the target population. Content validity was applied to the study. Cronbach’s Alpha coefficient was computed for all components of the questionnaire, and their assessment was provided. Descriptive analysis was computed using mean, frequencies, and percentages. Regression analysis tested the relationship between the study variables. The regression model assessed the relationship between the independent variables and the dependent variable. The findings were presented using tables and figures. Through regression analysis with a linear model result showed a strong relationship between risk management strategies and performance. The resulting value of regression coefficient at .000 (p<0.05) indicated existence of relationships that were relatively strong. The study thus concluded that performance of insurance companies is dependent on the careful choice or selection of risk management strategies. It is expected the results will benefit various stakeholders, including the government policy makers, Insurance sector players, and academia. Further studies exploring more strategies to manage risks in other entities including other sectors such as the finance sector could be undertaken by scholars.

Published

2024-11-09

How to Cite

Risk Management Strategies and Performance of Selected Insurance Companies in Nairobi City County, Kenya. (2024). International Journal of Business Management, Entrepreneurship and Innovation , 6(3), 79-92. https://doi.org/10.35942/bnkj9p70

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