Challenges of market penetration of general Insurance firms in Kenya
The main objective of the study was to establish the challenges of market penetration of general insurance companies in Kenya. The study was informed by the recent activities in the insurance market that has seen firms being forced to seek regional expansion without even saturating the Kenya market. This is for reasons that all players in the insurance industry are competing for the limited insured population that is estimated at less than 4% (IRA, 2012). This means that the insurance penetration levels in Kenya are very low hence the intense competition from the few players in a bid to capture the few insured customers. In order to achieve the above, the study adopted a cross sectional survey research design as an efficient way to obtain information needed to describe opinion and views of insurance companies’ functional and divisional managers on the market penetration challenges. The target population of this was 10% of all 44 licensed insurance companies in Kenya that were selected using simple random sampling. The collection of the primary data a was done using structured questionnaires that were pilot tested in order to ensure that there was reliability as well as validity. The coding of the data was done with the use of Microsoft Excel as well as SPSS in order to generate the descriptive statistics for instance frequencies and percentages. The presentation of the results was in form of figures and tables as well as cross tabulations. The findings on the contribution of the three strategies to enhance market penetration in the Kenyan market revealed that most of the respondents were of the opinion that Low cost leadership, differentiation, as well as market focus strategies can enhance market penetration of general insurance companies. Concerning the internal factors that make insurance companies to enhance market penetration, the study revealed that the majority of the respondents, highly rated product differentiation as an internal capability that enhances market penetration. At the same time majority of the respondents highly rated, pricing, customer service, management expertise and human resources, client communication, asymmetries, switching costs as internal factors that influence market penetration for general insurance companies in Kenya. With regards to the external factors that influence market penetration for general insurance companies in Kenya. The study findings revealed that the first mover advantage was highly rated to be the highest influencer as far as market penetration is concerned. This is also the case for government policy and regulation pressure, market conditions, as well as the strategic alliances. The study recommends that indeed the insurance industry is indeed a growing industry as far as acceptance is concerned. It is therefore important for organizations to consider adopting the three strategies in order to be able to enhance market penetration. The internal organizational capabilities vary from organization to organization, this therefore means that each organization has an opportunity to acquire and thereby enhance market penetration. The study therefore recommends that general insurance companies should maximize on their internal capabilities in order to enhance market penetration. The external factors that contribute to market penetration indeed play a vital role in the success of any insurance companies. The study therefore recommends that the government regulations as well as other external factors should be aligned in a way that ensures that there is room for companies to explore means of enhancing market penetration.