The assessment of risks as a component of corporate strategy in selected life insurance firms in Kenya
Risk is a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event. Risk to strategy can be intentional and an essential part of the company's strategic execution or can be unintentional or by-products of the strategic planning or execution process. Risks to strategy can be viewed as the risks to earnings or capital arising from adverse business decisions or improper implementation of those decisions. Risks to strategy are present due to the dynamism of the business environment that keeps changing rendering strategy as designed obsolete. Given this, the purpose of this study was to assess risks as a component of corporate strategy in life insurance firms in Kenya. The literature review examines eight key risk categories that may impact insurance firms. These are market stagnation risk, industry economics risk, globalization risk, customer risk, regulation and deregulation risks, technology risk, new project risk and competitor risk. It also explores the world of risk and identifies certain risk mitigating measures. Under methodology, the research employed a descriptive survey design. The population of the study consisted of only 23 insurance firms involved in life insurance. Data was collected by means of a questionnaire, which consisted of open-ended questions, closed-ended questions and matrix-type questions. Data analysis was conducted using descriptive statistics, which included measures of central tendency, measures of variability and measures of frequency among others. The findings indicated that the top three risks faced by insurance firms were competitor risk, regulation and de-regulation risk and industry economics risk respectively. Competitor risk was characterized by companies competing for the restricted market which was not made any better by the worsening economic situation. Given the reality of risks to company strategy, this study recommended that insurance firms further enhance the deployment of strategic planning tools that give the firms an outside-in perspective of the strategic planning process. Key words: Risk, Corporate Strategy, Life Insurance, Firms, Assessment.