dc.description.abstract | The insurance industry is important in an economy. Insurance business has stringent laws
regarding investments following its long term nature. The objective of this study was to establish
the relationship between portfolio holding and financial performance of insurance companies in
Nairobi county. The study adopted a Descriptive research design. All insurance companies
operating in Kenya as at 31st December, 2014 were included in the study hence a census. The
main source of data was secondary data from the Insurance Regulatory Authority, Association of
Kenya Insurers, and insurance companies themselves. The researcher conducted a multiple
regression analysis in order to determine the relationship between portfolio holding and financial
performance of insurance companies in Kenya. The study established that the insurance industry
has always invested heavily in the different sectors of the economy. The study found that there is
a positive and strong relationship between portfolio and financial performance of the insurance
companies. The study further found that there is an inverse relationship between investment in
stock and the overall profitability in the insurance industry. The study found that investment in
real estate had a direct relationship with the overall profitability of the insurance industry
whereby increased investment in government securities lead to increase in profitability of the
insurance industry. This study further found that investment in bank deposits by insurance firms
affects the profitability of the insurance industry positivelyhe study recommends that insurance
firms should encourage investments in stocks, government securities, real estates and bank
deposits. This will enhance profitability in the insurance industry. The study further
recommends that customers should be enlightened on the operation of investments in order to
enhance their profitability and performance. Additionally, the study recommended that insurance
agent should be frequently trained on the operation process and policies to eradicate occurrence
of error and mistake that are highly hindering penetration of insurance. | en_US |