Influence of insurance distribution channels on the financial performance of life insurance firms in Kenya
Date
2019
Authors
Wanduto, Geraldine Mwihaki
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The financial performance of insurance funds has been of interest to researchers however, there has been inconclusive evidence on the effect of distribution channels on the financial performance of life insurance firms in Kenya. The current study sought to solve this problem. To achieve this, the study focused on four specific objectives: to determine the effect of independent agency distribution channels on the performance of life insurance firms in Kenya; to find out the effect of bank-led distribution channels on the performance of life insurance firms in Kenya; to establish the effect of electronic intermediaries on the performance of life insurance firms in Kenya; and to assess the effect of direct distribution channel on performance of life insurance firms in Kenya. The study was based on two theories: Dynamic Capabilities theory, and Dynamic Marketing Capabilities theory. The study adopted a descriptive research design. Descriptive research was used to depict the current circumstance. The target population of the study was the 13 life insurance companies based in Nairobi County. The study sought managerial perspectives on insurance distribution channels and the performance of life insurance using a questionnaire: limn the sampled insurance distribution channels. A five-point Likert 1 scale poll was utilized to collect primary data using a structured questionnaire. To ensure the validity and reliability of the research instrument, a pilot study was conducted using a random sample of 10 respondents across the 13 life insurance firms. The collected research data were analyzed using descriptive analysis, correlation analysis, and regression analysis. The results of the research were presented using bat graphs, charts, and tables. The research was able to obtain a 91% response rate. An analysis of the collected data indicated that the four channels; independent agency, batik-led, electronic channels, and direct distribution were positively related to both return on assets and return on equity of life insurance firms. The results of the research indicated that there was a positive effect of distribution channels on the financial performance of life insurance. The research concluded that the distribution channels were integral in determining the financial profitability of insurance firms. The study recommends that insurance fumes should expand their distribution channels to target a broader market segment. This can be achieved through better online presence, training and development of agents, enhanced alliance with banking institutions, and increased market presence of insurance firms. The results are expected to enhance policy, practice, and academic fields.
Description
A Research dissertation submitted in partial fulfilment of the requirements for the award of Degree of Master's in Business Administration of Strathmore University