Effects of Digital Adoption on Performance of Insurance Companies in Kenya

Abstract

Technology, innovation and digitalization have been of benefit to a greater extent for organizations to achieve competitive advantage. Moreover, digital adoption is necessary as it enables firms to cope with changing needs of customers in the dynamic environment and has positive impacts in terms of customer satisfaction, faster service delivery, profit growth, consistency and processes improvements. The purpose of this study was to determine the effect of digital adoption on performance of insurance firms in Kenya. The specific objectives of the study were; to establish the extent of digital adoption by insurance firms and to establish the relationship between digital adoption and performance of insurance firms in Kenya. This study was guided by the technology adoption theory and the innovation diffusion theory. The study used descriptive research design and a census approach was adopted to target all the 54 insurance firms in Kenya as at December, 2020. Descriptive statistics were used to determine the extent of digital adoption in line with process, product and service while inferential statistics was undertaken using a regression analysis. The study established that there is a relationship between digital adoption and performance of insurance firms in Kenya, with digital adoption positively and significantly influencing performance of the insurance firms. The study concludes that digitalization enables the insurance firms to upgrade their processes, make product improvements and discharge quality services to their clients. The study recommends that insurance firms continually invest in technology and keep up with new innovations in order to enhance processes, products and service delivery to customers in order to improve company performance.