Strategic Capabilities and Performance of Insurance Firms Listed at the Nairobi Securities Exchange, Kenya

Abstract

The insurance sector has witnessed growth in both the corporate and private sectors driven by increased insurance uptake among corporations and individuals. However, despite the dynamic nature of the sector, some insurance firms face significant challenges in keeping up with their counterparts. To address the performance variations in the insurance sector, it is crucial to examine strategic capabilities such as technical knowledge, innovation, learning culture and service quality and their impact on performance of NSE listed firms in Kenya. This study aims to investigate how strategic capabilities influence the performance of these firms. The specific objectives of the study were: to examine the effect of innovation capability on the performance of NSE-listed insurance companies in Kenya; to determine the effect of service quality capability on the performance of NSE-listed insurance companies in Kenya; to investigate the effect of technical knowledge capability on the performance of NSE-listed insurance companies in Kenya and to examine the effect of learning culture  capability on the performance of NSE-listed insurance companies in Kenya. The study was anchored on the Resource based view theory, Knowledge based view and Dynamic capabilities theories.  A descriptive cross-sectional survey research design was adopted targeting 258 senior staff members of six listed insurance firms on the Nairobi Securities Exchange. A sample size of 156 respondents was determined by Yamane formula and stratified random sampling technique used for sample selection. Structured questionnaire was used for primary data collection with a pilot test involving 16 respondents to ensure the validity and reliability of the research instrument. Data analysis was performed with an aid of statistical packages for social sciences (SPSS) software employing descriptive statistics, correlation analysis and multiple regression models.  The findings revealed that innovation strategic capability, service quality strategic capability, technical knowledge strategic capability and learning culture strategic capability all had a positive significant relationship with performance of NSE-listed insurance companies in Kenya. The study therefore recommended that insurance firms listed at the NSE should invest in innovation, service quality, technical knowledge and learning culture to enhance their performance.