Operations Decision Making Efficiency in Insurance Companies in Kenya

Abstract

This study aimed to establish the operations decision making efficiency in insurance companies in Kenya. Specifically, the study aimed at establishing the key factors that influence insurers in making operational decisions, the business decision models used by insurers in making significant operational decisions and determining the efficiency of operations decision making in the Kenyan insurance industry. The study was guided by resource-based view theory, behavioral decision theory and industry organization theory. The research was conducted using a descriptive study. For the purpose of this study, the researcher used primary data. Data was collected through an experience survey using a questionnaire. The respondents were the operational managers in each of the 52 direct insurance companies in Kenya. The study established that there are significant factors that influence insurers in making operational decisions. These factors include leadership style adopted by top organizational leaders, desire for operational efficiency, cost of running the organizational structure, necessity of third party reports in decision making, customer focus in decision making, appreciation of ideas and abilities of management and support staff, delegation of power and responsibility to management and support staff, frequent changes in organizational design and amount of money involved etc. The study recommends that in order to ensure efficiency of operations decision making in the Kenyan insurance industry, there should be deliberate efforts to be put in place to enhance the skills of the companies‟ leadership. This focus brings about a shift in time allocations among insurance companies to identified priorities and indeed changes in traditional plans and programs. To deal with this alteration in operating environment, new models need to be considered.