Strategic Orientation and the Performance of Insurance Companies in Kenya

Abstract

Despite the role of the insurance industry in economic development, the growth of this industry in Kenya is a major concern. The industry is so fragmented given that there are 58 firms and just 5 of them have grown their market share to be able to compete with global firms. Studies done globally and locally in other sectors of the economy have shown a positive relationship between strategic orientation and the performance. This study evaluated the effect of Strategic orientation on the market share and gross premium as performance indicators for insurance firms in Kenya. Specifically, the study determined the effect of differentiation strategy, cost leadership and minimization strategy and customer focus strategy. Results indicated that strategic orientation (differentiation strategy, cost leadership, customer orientation) had a positive but insignificant effect on both the market share gross premium of insurance firms in Kenya. Keywords: Strategic orientation, differentiation, customer, cost, market share.