ISO Certification and Performance of Insurance Companies in Kenya

Abstract

In today‟s global environment, organizations are constantly looking for the ways to expand and improve their business in terms of performance. For firms to attain improved performance, they need to adopt standards laid down by International Standard Organizations (ISO). The insurance industry in Kenya is fast growing but is meeting serious challenges in performance, particularly for short term/general insurers who barely make reasonable profits. It is my concern with the foregoing that informed my decision to undertake a study on the relationship between ISO certification and performance of insurance companies. This study was based on two objectives. One of the objectives was to establish the relationship between ISO certification and performance of insurance firms. The other was to identify specific ISO principles adopted by different insurance firms in Kenya. The study was conducted through descriptive research design using survey. The survey sample size of 33 respondents was selected. The sampling method adopted was purposive. Data was collected using questionnaires. The collected data was analysed using descriptive analysis such as mean and standard deviation where by inferential statistics was done via regression analysis test. The study established that there is a positive relationship between the adoption of ISO 9001 certification by insurance firms and the performance of such firms. The study also established that insurance firms value their customers and that the opinion of their customers matters most. From the regression analysis conducted during the research, it came out that effective implementation of ISO principles positively impact on the Return on Assets (ROA) of insurance firms. This study recommends, therefore that given the positive relationship between ISO certification and performance of insurance firms, the Insurance Regulatory Authority (IRA) should make it mandatory for all insurance firms to adopt ISO certification as a means of improving performance. The research established that many insurance firms experience difficulties in implementing ISO principles to the same degree. As a result, I suggest that further studies be undertaken to establish the challenges faced by insurance firms in implementing ISO principles.