Internal Marketing, Regulations as Amoderator, and Competitive Market Dynamics: A Study of Insurance Firms in Kenya

Abstract

The dynamism of growing competition and the environmental organisations have to work together to win customers’ attention. Insurance is a quality dependent service where the service and the service provider are inseparable, hence the need for insurance companies to manage external market performance individually by changing the way contact employees engage with the external customer (Internal Marketing). Insurance firms in Kenya posted mixed signal of profitability and fluctuating number of policies during the six-year period from 2013 to 2018. Insurance penetration, a measure of insurance firms’ contribution to Gross Domestic Product also declined steadily from 2.88% to 2.43% in the same period. This was an indication that insurance professionals are not working to create competitive firms. The study sought to investigate the influence of internal marketing, insurance regulations (moderator) on competitive market dynamics. Other than look at Internal Marketing in the lens of material rewards, the study considered the special case of goal congruence in modelling organisation cultures where insurance firms and their employees pursue the same goal, at the same time. More specifically, the study assessed the combined effect of the elements of Internal Marketing including Management Support, Internal Communication and Employee Involvement as moderated by Insurance Regulations on the Competitive Market Dynamics. A mixed method involving quantitative and qualitative methods provided a pragmatic approach to the understanding of the social reality behind Internal Marketing and Competitive Market Dynamics in the presence of an Insurance Regulation. The mixed data was obtained from the 25 Life and 37 Non-Life insurance companies through a multistage data collection method involving census, purposive and convenience sampling methods. Data from the 62 insurance companies were obtained through a field interview guided by a Likert type questionnaire, distributed to employees and customers of insurance companies. The study used descriptive statistical methods to analyse the direct effect between the variables and Ologit and more specifically, the Structural Equation Modelling (SEM) Techniques. The study found that Internal Communication lacked statistical power on the Competitive Market Dynamics when, Management Support and Employee Involvement were statistically significant. Further, the results of Insurance Regulations indicated a significant improvement in the outcomes of Management Support, Internal Communication and Employee Involvement therefore, the research confirmed that Internal Marketing had a positive influenced Competitive Market Dynamics of insurance firms in Kenya. The research further confirmed that Internal Marketing worked well in the presence of a robust regulatory framework. The study recommended for an investigation into the reason why internal communication did not post significant result. Insurance regulation to be fully implemented to improve internal marketing practices of management support, internal communication and employee involvement