Quality Management Practices and Operational Performance of Insurance Companies in Kenya

Abstract

To establish how operational performance of insurance companies was affected by quality management was the main objective of this study. Specifically, the study sought to establish the quality management practices adopted by insurance companies in Kenya; the quality management challenges faced by insurance companies in Kenya and the relationship between quality management practices adopted and the operational performance of insurance companies in Kenya. Analyzing of the data with the aid of SPSS was done using descriptive statistics and inferential statistics. The study concludes that insurance companies have implemented quality management practices (top management support, strategic planning, process management, supplier management, and customer focus and employee involvement) to a great extent. The most implemented practices were customer focus, top management support, supplier management and employee involvement where they were all implemented to a great extent. The study also concludes there exists a strong link (R-value = 0.602) between quality management practices and operational performance of insurance firms with quality management practices being able to explain 36.2% of the total variance in the operational performance of insurance firms. All the quality management practices (top management support, strategic planning, supplier management, process management, and customer focus and employee involvement) were found to have a positive effect on the operational performance of insurance firms. The study further concluded that insurance companies face challenges when implementing quality management practices to a moderate extent. The challenges faced often by the insurance firms are resistance to change by the staff; lack of adequate experience in implementation and inadequate implementation personnel while the less often faced challenges were inadequate leadership and direction from managers; lack of understanding of the strategy by implementers and absence of the appropriate structures. The study makes the following recommendations. The management of the insurance firms should involve the employees in identifying the best practices to adopt in order to reduce resistance to change by staff. The insurance firms should also hire qualified staff that has the requisite expertise and experience in implementing quality management practices. Most respondents were reluctant in filling the questionnaires. They feared that the information sought through the questionnaires would be used against them. The scope of “this study was limited to the effect of quality management practices on the operational performance of insurance companies. This implies that the findings cannot be adequately applied to non-insurance firms. In future, a similar study should be done considering non-insurance firms such as commercial banks in order to establish how implementation of quality management practices affects their operational performance.