| dc.description.abstract | Strategic Risk Management is a process for identifying, assessing and managing risks
and uncertainties, affected by internal and external events or scenarios that could
inhibit an organization’s ability to achieve its strategy and strategic objectives. The
ultimate goal of strategic risk management is creating and protecting shareholder and
stakeholder value. This study focuses on an area that has not been expressly addressed
by other studies namely; strategic risk management in the context of insurance
provision. This study was designed to fill this gap using a case study of AAR
insurance Kenya Limited. This study sought to answer pertinent questions which
included: What are the unique risks facing AAR as a health insurance service
provider? How does AAR cope with the risks? And which pragmatic strategies that
can be used to mitigate the perceived risks at both the firm and industry levels? This
study employed case study research design. This is because the study intends to obtain
an in depth understanding on the strategic management practices of firms in the
insurance companies. The target population comprised of 40 senior management and
middle level staff at AAR Insurance Kenya Limited drawn from the department of
finance, underwriting and operation. The study adopted stratified random sampling.
The sample of 14 from a population of 40 forms 35.00% of the target population
which fulfils the minimum threshold. The study used interview guide to collect the
data. The interview guides were checked for completeness and consistency of
information at the end of every field data collection day and before storage. Data was
later subjected to statistical analysis using SPSS computer software. Data was
analyzed thematically using content analysis. According to the respondents reputation
is considered the most significant risk facing their company. Reputational risk is seen
to be the result of poor claims payments practices, the collapse or insolvency of
industry players, low profitability, inadequate customer handling processes and poorquality
customer service, low contract certainty and a lack of proper complaints
monitoring and handling processes. Based on the findings, external risk can arise at
various stages, e.g., registration of clients, underwriting, reinsurance and the claims
process. The severity of risk can range from a slight exaggeration to deliberately
causing loss of insured assets. The study recommends that the Board should continue
taking ownership and driving the risk agenda across the business. While senior
management with support from the CRO/Head of audit are involved in managing
risks, the oversight by the board cannot be delegated. It was also recommended that
the organization should focus on new emerging risk types such as reputation,
operational risks and IT security while not losing focus on the traditional risks such as
credit and market risks. AAR should also define Risk Management framework and
program which enables effective reporting and consolidation of data. | en_US |
