Competitive strategies and performance of insurance companies in Kenya
Competitive strategies are designed to enhance organization competitiveness. A competitive strategy comprises of business approaches to retain and gain more customers by satisfying their needs and expectations. The choice of a competitive strategy has a strong bearing on the performance and development of an insurance firm. The Kenya insurance industry comprises of 49 Insurance companies who are competing for a limited market share in a market that has a lower penetration of 2.93% as per Association of Kenya Insurers 2014 statistics which indicates a strong competition that exists between the industry players. Increased foreign investor interest in Kenyan market with recent acquisitions and mergers by foreign insurance companies for example Sanlam insurance group that merged with Pan Africa Life Insurance Company, Metropolitan Life Insurance merged with Cannon Assurance Kenya Limited and Saham Assurance of Libya acquired Mercantile Insurance Company limited shows that global institutions have identified Kenyan market as a strong development frontier in insurance business hence need for companies to develop strong competitive strategies that can support sustainable growth and enhance companies transient advantage in the market. The objectives of the research are to find out the relationship between competitive strategies and performance of insurance companies in Kenya. The questionnaire was the major too of enquiry that collected primary data while secondary data from regulatory authorities was incorporated to supplement the data collected by questionnaires. The research findings were analyzed through regression analysis and it was established that competitive strategies adopted had a large influence on the firm performance as measured by both financial and non financial metrics and it was also established that more companies are adopting strategic alliances and partnerships in order to increase and maintain respective market shares. The research recommends that government through its various agencies should put in place appropriate policies which support the insurance firms as a way of increasing the contribution to the economy. Further research is recommended on establishing the effect of competitive advantage on the survival of insurance companies and how portfolio mix influences the adoption of generic competitive advantage strategies by insurance companies in Kenya.