Micro-insurance strategies adopted by kenyan Insurance companies to create sustainable competitive advantage
The need for enhanced access to insurance at affordable rates to the lower end of the market has led to the establishment of micro-insurance business by Kenyan insurers. Following high administration costs, stiff competition, changing customer needs, new risks, lack of elaborate distribution and payment mechanisms in micro-insurance business, the insurance companies are required to adopt micro-insurance strategies that will create competitive advantage. The objective of the study was to determine micro-insurance strategies adopted by Kenyan insurance companies to create sustainable competitive advantage. The research adopted a descriptive survey research design whereby data was collected using self-administered questionnaires that were distributed to 15 insurance companies that offer micro-insurance products. The respondents were marketing manager, underwriting manager and/or supervisor from every company. Quantitative data collected was analyzed using descriptive statistics data analysis method while qualitative data analyzed using content analysis. Micro-insurance strategies revealed by the study include; cost leadership by the use of technology to lower administration cost, product differentiation, market focus, prudent underwriting, flexible payment of premium, thorough scrutiny of claims and efficient claims settlement, innovative distribution channels and customer education. Insurance companies offering micro-insurance products are advised to invest in research and actuarial services to improve pricing of products and on selection of risks, develop innovative distribution channels, adopt technology conscious partnerships, devise flexible premium payment terms to enhance control of micro-insurance risks, develop risk measurement models and the continuous monitoring of clients.