Kenya insurance companies' financial performance determinants
Wanjohi, Laura Muthoni
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The insurance firm is an integral aspect of Kenya's financial system, which is vital to the economy. With the growing need to be insured against various risks and the Emergence of different technological products, the insurance companies still have a low contribution to the GDP. For this study, we are establishing the factors that determine the financial performance of insurance companies across the general line,the life and combined line of business. The internal factors such as leverage, liquidity, loss ratio, underwriting risk, retention ratio and size of the firm were regressed against Return on Assets. The study shows that the loss ratio and leverage are important factors in the financial performance of general insurance firms, and they should improve on the leverage and reduce the loss ratio. The retention ratio,underwriting risk and firm size all have a role in life insurance bv.sinesses' financial performance which should be enhanced, and loss ratio decreased. The liquidity and loss ratio have a substantial impact on the profitability of insurance companies with both lines of business. In companies that have both lines of business, they should reduce the loss ratio and increase the liquidity.