Effect of Innovation Strategies on the Performance of Insurance Firms in Kenya

Abstract

The study sought to establish the effect of innovation strategies adopted on the performance of insurance firms in Kenya. The collected questionnaires were checked for consistency before being coded and entered into SPSS (version 21). Descriptive statistics such as frequency distribution and percentages were used to analyze general information. Means and standard deviations were used to analyze innovation strategies, operational performance and challenges of e-procurement. Regression analysis was used to explain the relationship between innovation strategies and the performance of insurance firms in Kenya. The findings are presented in form of tables, graphs and pie charts. On the extent of innovation strategies implementation, the study concludes that product innovation strategies, technological innovation strategies, marketing innovation strategies and process innovation strategies should all be implemented by the insurance firms. In regard to the challenges faced by insurance firms in Kenya when implementing innovation strategies, the study concludes that challenges are faced to a moderate extent with the most faced challenges being poor implementation innovative strategy, lack of a sound innovation management program and high cost of implementing new ideas. The study also concludes that there is a strong relationship between insurance innovation strategies and the performance of insurance firms in Kenya with e-procurement accounting for 35% of the total variance in the insurance firms’ performance. The study wishes to make the following recommendations in order to improve the performance of insurance firms in Nairobi. The study established that there is a strong and positive relationship between insurance innovation strategies and firm performance. The study therefore recommends that the management of the insurance firms in Nairobi should implement in full the innovation strategies as this will lead to improved firm performance. Some of the respondents were reluctant in filling the questionnaires fearing that the information sought would be used against them or their businesses. However, the researcher handled the limitation by assuring the respondents that the information being collected will be used for academic purpose only and that it would be treated with utmost confidentiality. The study was confined to insurance firms operating in Nairobi. A replica of the study should be carried out in non-insurance firms order to improve on the study findings and policy change recommendations arising from this study to facilitate making of more adequate conclusions.