Effect of Strategic Responses on Competivenessof Insurance Brokers in Kenya

Abstract

Thisstudy sought to determine the effect of strategic responses on competitiveness of insurance brokers in Kenya. The study employed a descriptive research design and study’s population comprised the 188 insurance brokers in Kenya as of July 2020. The study thus undertook a census design to select the 188 insurance brokers with the unit of analysis being the brokerage firms’ managers. The study used primary data, which was collected usingquestionnairesthatwere dropped to the brokerage firms’ managers or their equivalents and picked after two weeks for the brokerage firms within Nairobi and emailed to brokerage firms outside Nairobi. Descriptive and inferential statistical tools was used for data analysis using the SPSS statistical software. Inferential statistics entailed regression analysis, which was used to determine the variables interrelationship. The study findings revealed that market expansion, diversification and cost cutting were the largely adopted strategies while innovation, strategic alliances, strategic outsourcing and downsizing were moderately adopted by the insurance brokerage firms. Regression analysis results revealed that diversification, innovation, market expansion, cost cutting and downsizing had a positive and significant effect on competitiveness of the insurance brokers in Kenya. Further, the study found that strategic alliances and strategic outsourcing had an insignificant and positive effect on competitiveness of the insurance brokerage firms in Kenya. The study concluded that that market expansion, diversification and cost cutting were the largely used strategic responses strategies while innovation, strategic alliances, strategic outsourcing and downsizing were the moderately used strategic responses by insurance brokers in Kenya.The study also concluded that that diversification, innovation, market expansion, cost cutting and downsizing response strategies significantly enhanced competitiveness of the insurance brokers in Kenya while strategic alliances and outsourcing does not significantly enhance the competitiveness of the insurance brokerage firms. The study recommended thatthe management of the insurance brokerage firms ensure they diversify their activities, undertake innovative initiatives, expand to new as well as the current market to ensure their services and products reach a wider audience to enhance their competitiveness as well as performance of their firms.