Strategy implementation and performance of insurance companies in Kenya
The application of strategic management in business for various sectors has long been adopted as a response to market demand, variation in clients taste and changing in technology.In as much as strategies could be brilliant, they do not assure effective performance. How the strategies are implemented matters in determining organizational performance. Strategy implementation is one of the components of strategic management and refers to a set of decisions and actions that result in the formulation and implementation of long term plans designed to achieve organizational objectives. The Insurance industry plays a significant role in Kenya’s economy. The insurance penetration at 3.16% in 2012 is above majority of African countries but it is far below the emerging markets where Kenya aspires to be. The objectives of the study were to determine the extent of strategic planning process among insurance companies in Kenya and to find out the relationship between strategy implementation and performance of insurance companies in Kenya. The study relied on the resource based view of strategy implementation and relevant literature was reviewed. This literature provided critical analysis of the study and helped to improve the methodology. Census survey was adopted as the research design for this study. The population of the study was forty four finance managers in insurance companies. Data was collected using semi-structured questionnaires and was analyzed using descriptive statistics. The data was coded and entered into a spreadsheet and analyzed using excel packages. From the findings, the study found that all insurance companies have embraced strategic planning process but the degree of strategy implementation differs across companies. The study further found that a relationship exists between strategy implementation and performance of insurance companies in Kenya. Most insurance companies place more emphasis on financial measures of performance and believe strategy implementation has greater impact on these financial measures. This study established that insurance companies’ primary focus is to grow their premium hence market share. The study recommends that there is need to shift and focus more on implementing strategies geared towards product development and customer satisfaction. The study also found that allocation of resources is a major ingredient for successful strategy implementation hence insurance companies need to identify their capabilities and allocate resources adequately towards strategy implementation. The study recommends that in order for the Insurance Regulatory Authority (IRA) to effectively implement risk based supervision in the insurance industry it will have to monitor the strategic risk of all companies.