The Effect of innovation capability on competitiveness within listed insurance firms in Kenya

Abstract

The insurance sector in Kenya has been lagging behind in adopting innovation. This has seen insurance penetration levels within the sector stagnate at very low levels. This study seeks to examine the effect of innovation capability on competitiveness of listed insurance firms in Kenya. The study specifically sought to determine the effect of market innovation, technical innovation and product innovation on competitiveness of listed firms. The research was premised on the resource-based view theory and innovation diffusion theory. The unit of analysis of the research was the six listed insurance firms in Kenya. The unit of observation was drawn from 8 senior managers within the listed firms. The sample size for the study was 48 personnel within the listed firms. The study collected primary data using a structured questionnaire administered electronically through google forms. The study was able to obtain a response rate of 95%. The research conducted a pilot test with 4 of the sample respondents. The research data collected was analysed through use of descriptive analysis, correlation analysis and inferential analysis. Findings of the research indicated that innovation capability explained 10.9% (R2=.109) of the variations of competitiveness in the insurance industry. The study concludes that listed insurance firms can enhance their competitiveness by leveraging on their innovation capabilities. The study recommends that the firms should enhance their infrastructure development, integrate new technologies in marketing and foster their product development.