Effect Of Strategic Innovations On Performance Of Insurance Firms In Kenya

Abstract

The performance of insurance firms globally has been subject to various economic and market factors that have affected their revenue growth and profitability over time. Integrating strategic innovations into their business practices can benefit the long-term performance of insurance firms by improving their financial performance, mitigating risks, and enhancing their reputation among stakeholders, including customers, employees, and investors. Therefore, the main aim of this research was to evaluate how strategic innovations influence performance of insurance firms in Kenya. The study seeks to achieve the following specific objectives; to establish the effect of technological, product, process and marketing innovations on performance of insurance firms in Kenya. The study adopted the dynamic capabilities theory, agency theory, resource based view theory and transaction cost economics theory. Descriptive research design was employed in this research. This research target population was 56 insurance firms in Kenya. Census was used in this study where all 56 insurance firms were involved in this study and three respondents from operations, finance and marketing were involved in the study. Questionnaire were utilized in gathering primary data. Quantitative data was collected. The collected data was analysed through descriptive, correlational and multiple linear regression method. Regression results revealed that technological innovations, product innovations, process innovations, and market innovations together account for 93.5% of the variation in the performance of insurance firms in Kenya. The explanatory power of the model was statistically significant as the p value was 0.000. Further the results revealed that technological innovations (β = 0.283, p < 0.000); product innovations (β = 0.257, p < 0.000); process innovations (β = 0.713, p = 0.004); and market innovations (β = 0.320, p < 0.000) had a positive and significant effect on performance of insurance firms in Kenya. This study concludes that technological, product, process, and market innovations significantly enhance the organizational performance of insurance firms in Kenya. The higher emphasis on process innovations displayed the most substantial impact, underlining its crucial role in organizational efficiency and effectiveness. It is recommended that insurance firms strategically invest in diverse innovations, focusing on integrating advanced technologies and fostering a conducive environment for innovation. Further research should delve deeper into the intricate relationships between various innovation types and organizational performance components across different sectors and contexts.