Factors Affecting Performance of Insurance Companies in Nairobi County, Kenya

Abstract

Insurance companies provides employment opportunities through its marketing and distribution chain networks such as direct insurance agents,insurance brokers,loss assessors,loss adjusters and insurance companies besides the general public having a negative perception towards insurance companies; either due to past experience with the insurance copmanies or collapsing of insurance companies.Some of the common past experiences ranges from delays in claims settlement or non payment of claims at all, relying on policy exclusions to decline an idemnity,rigorus investigations and risk assesments,claims repudiations,unnecessary demands for alot of documentation and precedures which a claimant perceives as a delaying tactics to idemnify the customer or to decline a claim.This study sought to determine factors affecting performance of insurance companies in Nairobi county, Kenya with a view to know why some companies are collapsing while others are doing well in the same insurance industry.This study was guided by the following research variables: regulation,claims processing,management and capital resources.This study adopted a census research design.The targeted population for this study consists of 60 senior mostmanagement staff working for the top 10 performing insurance companies in kenya, specifically targeting their head offices situated in Nairobi county.This targeted the top management staff especially the chief excecutive officers (CEO’s) and the line managers in various departments due to the significant role they play in management of the insurance companies.This study collected both primay as well as secondary data. This studygenerated both quantitative as well qualitatitive data.Descriptive statistics data analysis method, wasused to analyze both the quantitative and qualitative data.Data collected using the questionnaires was processed through editing ,coding and then entering into a computer for analysis with the use of descriptive statistics using the help of StatisticalPackages for Social Sciences (SPSS) version 21.0.The data was presented using bar charts,frequency distribution tables,graphs and pie charts for ease of interpretation and understanding. The study concluded that the insurance regulator is not effectively regulating the insurance industry in Kenya and they don’t take action immediately whenever an insurance firm is unable to meet its financial obligations.In addition, the study concludes that the traffic police, doctors, lawyers and ambulance chasers contribute to lodging of fake claims which affect performance of insurance firms in kenya,on insurance companies management, the study concludes that, good strategic plans, both short term and long term plans contributes to high performance; leading to insurance companies’ better performance and sustainability.Finally, the study concludes that lack of enough capital resources in an insurance company have lead to poor performances thus contributing to collapse of insurance firms in Kenya and again,capital provides a foundation for an organization’s future growth and protects the organization against unexpected future losses.