THE INFLUENCE OF RISK RESPONSE STRATEGIES ON PERFORMANCE OF INSURANCE COMPANIES IN NAIROBI COUNTY, KENYA
Abstract
The study sought to investigate how risk response strategies influence the performance of insurance providers in Nairobi County. The following objectives served as the study's guiding principles: to determine the influence of risk transfer on the performance of insurance firms in Kenya; to evaluate the influence of risk reduction on that performance. The purpose of the study was to understand how each independent variable influences the dependent variable and to assess the link between risk response methods. The study adopted descriptive research design and the sample size of 241 was determined using Taro Yamane’s formula and the respondents were top tier management level, risk managers and risk officers who were chosen using stratified and purposive sampling. Pilot study was carried out using 10% of the sample size. Structured questionnaires were used to collect primary data while performance was measured by collecting secondary data and SPSS version 26 was used to analyze data. Descriptive such as mean, frequencies, standard deviation, and percentages were used to profile major patterns emerging from the data. The relationships between the variables were determined using inferential statistics. The regression analysis was used to gauge the intensity of the association between the independent and dependent variables, while the correlation coefficient was used to gauge the link between the independent and dependent variables. Data was presented in form of tables, graphs. The findings established that risk response strategies had a positive and significant influence on performance of insurance companies in Nairobi Kenya. The study recommended that insurance companies to capitalize on the use of risk reduction and risk transfer strategies since they have a strong and positive influence on performance. Since risk transfer had the highest influence on performance of insurance companies in Nairobi County, the study recommends the enhancement of cooperation of insurance companies in undertaking risky insurance contracts as well as broadening scope of reinsurance portfolio undertaken with reinsurance companies.
Key Words: Risk Response Strategies, Performance, Insurance Providers, Risk Transfer, Risk Reduction
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