Strategic responses by life insurance companies in Kenya to the threat of new entrants and new products
This study sought to establish the strategies adopted by life insurance companies in Kenya to the threat of new entrants and new products. The study was conducted using a cross-sectional survey design. It was based on the 24 life insurance companies in Kenya. Primary data was collected using self-administered drop and pick questionnaires. The questionnaires were semi-structured, having both open-ended and closed ended questions. A content analysis and descriptive analysis were used to analyze the data. The study established that the majority of the life insurance companies were fully locally owned. According to the findings the life insurance companies in Kenya employed strategic responses in light of increased competition from new entrants and products. Further to the findings, the insurance companies used cost leadership, focus strategy, market development, Product development, and information technology at varying levels. Not all the companies applied the following strategies: joint venture, market penetration, diversification, acquisition and strategic alliances. It was concluded that strategic responses are important for a firm to stem the threat of new entrants and products and that life insurance companies in Kenya are not exploiting fully the benefits accrued from the use of response strategies in dealing with competition as a result of the new entrants and products. The study recommends that life insurance companies need to embrace strategic responses that will give them an opportunity to gain market share so as to improve their competitive edge. These strategies include acquisitions, mergers, market penetration, diversification and strategic alliances.