Managers’ Perceptions on How the Selected Bancassurance Aspects Affects the Performance of Insurance Companies in Kenya

Abstract

One of the major recent advancements in the financial industry is offering insurance services and products by banks. This is what is commonly referred to as Bancassurance. In this case, the insurance services and products are offered alongside different banking services and products. The banks can offer the insurance services independently or in collaboration with the insurance companies. Bancassurance has been seen as a tool utilized by the insurance organization to gain competitive edge and overcome stiff competition in the industry. The main aim of this study was to find out the perception of managers on how the selected bancassurance aspects affects the performance of insurance companies in Kenya. The aspects related to bancassurance that were considered includes products or services type, administration-economies of scale, customer lifecycle management, and sales promotion tool. This research was based on innovation theory, the dynamic capabilities theory, and modern portfolio theory. A descriptive survey research design was applied in this study. The study targeted 506 management staff who were drawn from the major listed insurance companies in Kenya. The research used a random sampling technique to pick the sample size participants. Primary data were acquired using questionnaires. The research tools were allocated among the selected participants using different reference points, such as departmental managers. Moreover, data analysis was done using Statistical Package for Social Scientists (SPSS) computer software. The qualitative data was thematically coded and then statistically analyzed. Besides, content analysis was utilized for data that is qualitative in nature or aspect of the data obtained through the use of open-ended questions. Different approaches such as the use of tables and graphs were used to display information. The research revealed that Bancassurance products or services type affect performance of Insurance organizations in Kenya greatly. The study further showed that performance of insurance companies in Kenya is boosted by enhanced value and distribution channel optimization very greatly. In addition, study revealed that the customers trust and convenience enhanced the performance of Insurance firms in Kin the country vary greatly. The study also found that sales promotion tool affected performance of insurance companies in Kenya greatly. The study concluded that Bancassurance products or services type had the greatest impact on the success of insurance companies in Kenya, followed by Bancassurance customer lifecycle management, then Bancassurance sales promotion tool and finally administration-economies of scale had the least effect. The research proposes that the insurance organizations in Kenya should make sure that the client is guided by comprehending the market and directing the company's resources towards meeting the needs of the clients and by evaluating the capacity to deliver what is required by the client.