Assessing the Moderating Role of Risk Management Capabilities in the Relationship Between Service Innovation and Financial Performance of Insurance Firms (original) (raw)
Related papers
International Journal of Social Science and Humanities Research (IJSSHR) ISSN 2959-7056 (o); 2959-7048 (p)
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 o...
Insurers' risk management as a business process: a prospective competitive advantage or not?
European Journal of Management and Business Economics, 2021
PurposeInsurance companies exist to manage the risk of others, which is why they are perceived to be competitive in risk management (RM). Considering this, we investigate how different RM capabilities make insurers effective in RM. These capabilities include understanding risk and risk management (URRM), risk identification (RI), risk assessment and analysis (RAA) and risk monitoring (RMON) activities in insurance companies. In addition, the authors probe how these capabilities can jointly yield a competitive advantage for the insurance industry under the resource-based view (RBV) and dynamic capabilities perspective (DCP).Design/methodology/approachThe authors present a latent variable RM model for the insurance industry and employ structural equation modeling (SEM) to test the hypotheses. Furthermore, the authors also conduct confirmatory factor analysis (CFA) and convergent and discriminant validity analysis for model fit and invariance testing, respectively.FindingsThe results s...
The Effect of Learning Orientation on Innovative Service Development and Insurance Firm Performance
2021
This research assessed the effect of learning orientation on innovative service development, business growth and profitability in the insurance sector. The study relied on the resource-based view (RBV) and the dynamic capabilities of a firm. Three hundred and five (305) top and middle managers of insurance firms, brokers and reinsurance within the Ghanaian setting were surveyed. The findings indicated that commitment to learning and shared-vision that define learning orientation indicate a positive and significant effect on innovative service development activities. Similarly, the results also showed that innovative service development has a significant and positive effect on business performance. The indirect effect was significantly positive, which buttresses the essence of ISD in the insurance sector. The study re-echoed that commitment to learning and shared vision necessitate insurance firms, brokers and reinsurance players to be more proactive in introducing innovative service...
Business and Economic Research, 2013
and academic experts. Accordingly, first, by studying the literature and background of the subject, 35 subsidiary factors of this structure were defined and after doing some interviews with experts, these factors decreased to 16. Then, questionnaires were distributed among Iranian insurance industry's experts. Then, 269 filled questionnaires were collected. Next, Factor Analysis and Structural Equation Modeling were used to discover the conceptual model; as a result, the proposed model was extracted. Our finding has been the design and modeling of factors affecting innovation performance of firms in the insurance industry.
Risk management and financial performance of insurance firms in Kenya
Cogent Business & Management, 2021
This study examined the relationship between risk management and the financial performance of insurance firms in Kenya over the period 2013–2020. The data was collected from 51 Insurance firms licensed to operate in Kenya as of 31 December 2020. Regression analysis was used and the results showed that risk management significantly affects the financial performance of insurance firms. In particular, the results indicate that credit risk negatively and significantly affects financial performance. The results suggest that firms with a higher proportion of non-performing receivables than total receivables perform poorly. Insurance firms should therefore put in place credit management strategies to ensure receivables are collected within the stipulated time to avoid cases of non-performing receivables and thus improve performance. The results also showed that market risk management positively and significantly affects financial performance. The findings imply that sound investment decisions result in an increase in investment income, which in turn increases financial performance. Insurance firms should therefore ensure proper management of their investments to boost performance. The findings also indicate that operational risk management positively and significantly affects financial performance. The findings suggest that proper management of firms’ operations results in reduced operating costs, which in turn result in an increase in net premiums and positively impact the performance of a firm. Insurance firms should thus implement proper operations management strategies to reduce costs and enhance financial performance. The results also indicate that liquidity risk management positively and significantly affects financial performance. The results imply that proper liquidity management ensures an increase in the proportion of current assets to current liabilities and in turn enhances the performance of a firm. Firms should thus ensure there is sufficient liquidity to discharge obligations when due to enhanced performance. This study demonstrates that risk management significantly affects the performance of insurance firms. Therefore, we recommend that directors and other stakeholders should put in place proper risk management strategies to boost financial performance. We also recommend that regulators and policymakers should come up with policies and regulations that will ensure firms adopt appropriate risk management strategies to enhance performance. The study contributes to the risk management literature by providing an empirical examination of the effect of the various risk management strategies adopted by insurance firms and gives recommendations that can be utilized by policymakers in assessing and reviewing risk management mechanisms. The study also gives recommendations to managers and other stakeholders regarding risk management mechanisms that can be adopted to boost the performance of a firm.
Influence of Innovation on performance of Insurance companies in Kenya
2016
The need for improved performance by insurance companies in Kenya in both life and non-life segments has been underscored and innovation has been identified as a means to boost performance. The main objective of this study was to determine the influence of innovation on performance of insurance companies in Kenya. The study adopted the use of a descriptive crosssectional design. A census survey was used with the study population comprising all 49 insurance companies operational in Kenya as at 31 st December 2014. Primary data was collected using structured questionnaires. Data was analyzed using SPSS statistical package program version 22 for descriptive and inferential statistics. The results of the study revealed that product innovation positively and significantly influences organizational performance (β=57271.822, t=2.423, p<0.05) and process innovation positively and significantly influences organizational performance (β=91651.229, t=2.485, p<0.05). No evidence was found for a significant relationship between market innovation and performance (β=20108.084, t=0.196, p>0.05). The results also showed that process innovation was the most predominant type of innovation in the insurance industry in Kenya. Additionally, the survey found that among the three types of innovation studied, process innovation registered the strongest correlation to organizational performance (coefficient value 0.584, 0.01 level of significance, and p value 0.001). The study recommends that management of insurance companies in Kenya should place greater emphasis on process innovation in order to improve performance. Further research should adopt a longitudinal research design, multiple informant approach, wider scope of study and the use of both objective and subjective measures to assess performance. These will give useful insight into the relationship between the variables under study.
Journal of Law and Sustainable Development
Purpose: This paper examines the effect of risk management practices on organizational performance and the mediating role of business model innovation in Nigeria. Design/Methodology/Approach: This research uses quantitative research methods. The paper uses a sample of 83 employees, with data collected through an online questionnaire using a Likert scale using a scale of 5, and the data was analyzed using partial least square structural equation modeling (PLS-SEM). The stages of data analysis begin with testing the validity and reliability of the instrument, determination and finally testing the hypothesis. Findings: The results showed that practices for risk management and financial performance had a direct and large effect on financial performance. Furthermore, risk management practices are linked to non-financial performance. The result shows that business model innovation has a negative relationship with non-financial performance. It has a positive impact by meaningfully stre...
Journal of Research in Business, Economics and Management, 2018
This paper begins with academic empirical findings on current state of maturity with ERM (Enterprise Risk Management) as evidenced by research survey at SIC Company Ghana. The study of ERM (Enterprise Risk Management) took a qualitative research strategic approach, the study analysis of non-numerical qualitative data is expressed through words that is used to find answers to the stated hypothesis , which is applicable to this study. The research data collected was based on a single case study considering that the annual reports only indicated whether the company used COSO’s framework and ERM practices, a further investigation had to be made to ensure the suitability of the potential case company. State Insurance Corporation (SIC) Ghana was contacted considering that the company seemed to be using the COSO framework as well as having a strategic thinking regarding risk. The aim of the study was to investigate the usage of ERM (which should permeate the organization. To answer the res...
Innovation Strategies and Competitive Advantage of Insurance Firms in Kenya
Journal of business and strategic management, 2023
Purpose: The main focus of the study was to establish effect of innovation strategies on competitive advantage of insurance firms in Kenya. The study was anchored on McKinsey 7S Framework, Transaction Cost Innovation Theory, Porter's 5 Forces Model and Dynamic Capabilities theory, and it sought to establish the effect of product innovation strategy, process innovation strategy and marketing innovation strategy on competitive advantage of insurance firms in Kenya. In addition, the moderating effect of regulatory environment on the relationship between innovation strategy and competitive advantage of insurance firms in Kenya was tested given the importance of the regulator. Methodology: The study used a cross sectional survey design where all the 55 insurance firms operating in Kenya and were targeted. Through purposive sampling, the study targeted employees in management positions, either from administration, sales and marketing, strategic division or Finance department. Both primary and secondary data was used to achieve the study objectives where they were used to establish trends, descriptive and inferential statistics. Specifically, correlation and regression analysis were conducted to test empirically the relationship between the study variables. The study results were presented in form of Tables and Figures. Findings: The findings revealed that product innovation strategy had a significant and positive influence on the competitive advantage of insurance industry in Kenya. Process innovation was also found to positively and significantly contribute to the competitive advantage of insurance industry in Kenya. The findings further revealed that marketing innovation was essential in enhancing the competitive advantage of insurance industry in Kenya. Regulatory framework was found to significantly moderate the relationship between innovation strategies and competitive advantage of insurance industry in Kenya. The study concluded that innovation
Organizational Resources, Innovation and Performance of Insurance Companies in Kenya
Dba Africa Management Review, 2015
In spite of a growing body of literature on firm performance, explaining why firms in the same industry and markets differ in their performance remains a fundamental question within strategic management field. While some researchers have attributed these differences to the resources owned and controlled by firms, others have argued that resources alone do not explain the differences in the firms' performance. This debate still continues, hence providing room for further contributions. Underpinned by the postulations of resource based theory, dynamic capabilities theory and knowledge based theory; this study contributes to the debate. The study advances the proposition that resources influence performance through the intervening effect of innovation. The proposition is empirically tested using both primary and secondary data from 46 Insurance Companies in Kenya. The results reveal that both tangible and intangible resources have a statistically significant direct influence on non-financial performance despite mixed findings as regards to the independent effects of resources on various firm performance indicators. Innovation was found to have a statistically significant intervening influence on the relationship between resources and non-financial performance. The findings offer some support for the anchoring theories as well as partial support to previous similar studies. In spite of the inherent limitations, the study advances the frontiers of knowledge in confirming the anchoring theories while providing ground for policy direction and managerial practice.