Entrepreneurial Marketing and Performance of Insurance Companies in Kenya

Abstract

Despite the role of 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 entrepreneurial marketing and the performance. However, literature review shows that entrepreneurial marketing and its effect on performance of insurance firms has not been examined widely. This study evaluated the effect of entrepreneurial marketing variables on the gross premium and market share as a performance indicator for insurance firms in Kenya. Specifically, the study determined the effect of: strategic orientation (differentiation strategy, cost leadership, customer orientation) innovation orientation (product innovation, processes innovation, market innovation), and innovation orientation (product, process, and market) on the gross premium and market share of insurance firms in Kenya. The study also investigated the effect of market orientation (frequency of market surveys and budget for market research) and resource leveraging (human resources and partnership and alliances) on the performance (Gross premium and market share) of insurance firms in Kenya. The study utilized both descriptive and causal research designs. The target population was 406 heads of relevant departments in the 53 registered insurance companies and 5 reinsurance companies. A sample of 197 respondents was selected for the study, and data was collected using semistructured questionnaire. 142 questionnaires were returned and the data was analyzed quantitatively. Results indicated that strategic orientation (differentiation strategy, cost leadership, customer orientation) had a positive but insignificant effect on the performance (Gross premium and market share) of insurance firms in Kenya. Innovation orientation (product innovation, processes innovation, market innovation), market orientation (frequency of market surveys and budget for market research) and resource leveraging (human resources and partnership and alliances) had a positive and significant effect on the performance of insurance firms in Kenya. The study also established a negative but significant moderating effect of the regulatory framework (capitalization and licensing) on the relationship between entrepreneurial marketing and the performance of insurance firms in Kenya. Conclusion was reached that insurance firms should always consider the four dimensions of entrepreneurial marketing if they are to improve their performance in terms of market share. The study recommended