Abstract:
This study sought to evaluate the correlation between innovation orientation and performance in insurance companies in Kenya. Specifically, the study examined the effect of product innovation, process innovation, and market innovation on the performance in terms of gross premium and market share in the Kenyan insurance industry. The study adopted a framework to examine the relationship between the three types of innovations using descriptive and causal research designs. The target population was 406 heads of departments in 53 registered insurance companies and 5 reinsurance companies. A sample of 197 respondents was selected for the study, and data collected using semi-structured questionnaire and analyzed using multiple regression. Results showed that product innovation, process innovation and market innovation have a positive and significant effect on both the gross premium and market share of insurance firms in Kenya. There is need to allocate more resources to support innovation in a bid to penetrate new markets and improve performance. Product innovation should be geared towards introduction of insurance policies that are aligned to agriculture in the rural arears being the prevalent economic activity and other major contributors to Kenya’s GDP.
