dc.description.abstract | In today’s business environment, products and services can be rendered obsolete within
months and corporate market shares at risk almost on a daily basis, hence the reason why
strategic management and diversification are topics of great interest in the insurance
industry today. The insurance industry experiences various challenges in its operating
environment especially in the developing countries like Kenya. There is widespread
customer dissatisfaction in the insurance industry, stemming from insurers’ failure to
provide diversified product and service portfolio to satisfy customers’ ever changing
needs and wants. In an effort to cope with such challenges the insurance companies use
different diversification strategies to not only remain profitable but also become stable
financially. This study utilized a descriptive survey design on the diversification
strategies which insurance companies in Kenya use to remain profitable and stable. This
study, therefore, sought to find out diversification strategies which the insurance
companies use to attain their targets. Data was collected from a sample of fifteen
insurance companies selected from a total of forty six firms operating in Kenya. The
researcher used convenient random sampling technique to obtain the required data. The
researcher collected data using a structured questionnaire which were sent using either
electronic mail or hand delivered to the respondents who filled the questionnaire for later
collection. The collected data was analyzed using descriptive statistics which included the
arithmetic mean, median and mode and this was used to answer the research questions.
The study found out that concentration on the core business of selling insurance is the
most popular diversification strategy among insurance companies operating in Kenya.
However some other insurance companies have done unrelated diversification in other
areas like real estate management, property management, warehousing, agriculture,
banking, stock market, and other areas of the economy. It is recommended that insurance
companies should concentrate on their core activities as they diversify into other areas to
supplement their income | en |