| dc.description.abstract | The study was set out to examine the financial management practices as used by insurance companies in Kenya, and to find out the relationship between financial performance and financial management practices of 45 Insurance companies in Kenya. The study employed a census survey. Primary data was collected through questionnaires which were dropped and picked from the respondents. Of the target population of the study, 33 questionnaires were returned and this represented 73.3% response rate. Secondary data was obtained from published financial statements filled annually at Insurance Regulatory Authority (IRA) offices, insurance companies’ offices and College of insurance library.
The study found out that the most common financial management practices used by insurance companies were accounting information systems (AIS), financial reporting and analysis (FRA), working capital management (WCM), fixed asset management (FAM), and capital structure management (CSM). All these practices were crucial for an efficient financial management in organizations. On the relationship between financial performance and financial management practices, the earnings before interest and tax and total assets, the data was collected from published financial statements filled annually at Insurance Regulatory Authority (IRA) offices, insurance companies’ offices and College of insurance library. The data was analyzed using the statistical package for social sciences (SPSS) version 17.
The study used multiple regression analysis to examine the association between financial performance and financial management practices of Insurance companies in Kenya. Forecasting model was developed and tested for accuracy in obtaining predictions. The finding of the study indicated that model was significant. This was demonstrated in the part of the analysis where R2 for the association between financial performance and financial management practices of Insurance companies in Kenya was 76.9%. In other words the results revealed a consistent, significant positive association between financial performance and financial management practices measured by ROA.
It is recommended that a similar study be carried out in other sectors of Kenyan economy to test the same relationship and also in a specific industry to obtain homogenous results. | en_US |
