Digital capabilities and operational performance of general insurance companies in Kenya: the moderating role of governance oversight

Abstract

The rapid advancement of digital technologies has reshaped the operational landscape of general insurance companies worldwide. However, the extent to which these digital capabilities influence performance outcomes remains underexplored, particularly within the local insurance sector. This study examined the influence of digital capabilities on the operational performance of general insurance companies in Kenya, with a focus on the moderating role of governance. Specifically, the study assessed how transaction security, digitally-enabled claims processing, and emerging technologies relate to operational performance, and how these relationships are moderated by governance. The study was grounded in the Dynamic Capabilities Theory and the Resource-Based View Theory. The research adopted a descriptive cross-sectional design and employed a census approach targeting all 36 licensed general insurance companies in Kenya. The final sample consisted of 63 respondents drawn from 34 insurance companies, with each participating company providing between one and three senior managers from operations, information technology, finance, underwriting, and strategy functions. The study was conducted between March and April 2026. Quantitative data analyses were conducted using descriptive statistics, correlation analysis, hierarchical multiple regression, and moderated regression analysis. The findings revealed that emerging technologies had a positive and statistically significant relationship with operational performance, indicating that firms with higher adoption of advanced digital technologies tended to report stronger operational outcomes. Transaction security and digitally-enabled claims processing exhibited positive but statistically non-significant relationships with operational performance. The findings further revealed that governance did not significantly moderate the relationship between digital capabilities and operational performance. The study concludes that emerging technologies represent a strategically important digital capability within the Kenyan insurance sector. The findings imply that insurance firms should prioritize advanced digital transformation initiatives and strengthen the integration of emerging technologies within core operational processes. The study contributes to theory by providing empirical evidence that suggests a distinction between foundational and transformative digital capabilities in explaining operational performance. The originality of the study lies in integrating governance into the relationship between digital capabilities and operational performance within Kenya’s general insurance industry, an area that has received limited empirical attention.