Innovation Strategies and Performance of Insurance Brokerage Firms in Nairobi County, Kenya

Abstract

The insurance industry in Kenya has been recognized as a major player in the Kenyan economy. The insurance brokerage industry remains one of Kenya's most flamboyant financial sectors, especially in Nairobi County. However, there has been the saturation of intermediaries in the insurance sector, especially in Nairobi County. Thus, the study sought to examine the influence of innovation strategies on the performance of insurance brokerage firms in Nairobi County, Kenya. The study used the descriptive survey technique. The target population constituted 216 insurance Brokers companies within Nairobi as per the year 2019 (Commissioner of Insurance, 2018). The sample size was 140 institutions found using the Yamane (1967) formula. The questionnaire was used for primary data collection. Secondary data sources included IRA publications, company financial statements and company websites. Descriptive statistics and inferential statistics were used for the data analysis. The study established that product innovation, service innovation and market innovation had a positive and significant influence on the performance of insurance brokerage firms in Nairobi. The study concluded that the importance of product innovation in the company's growth and development could not be overstated. A new service idea is considered an innovation if it is a deliberate change in the service provided, provides a new or significantly improved benefit to the customer, significantly improves the service firm's profitability, and can be replicated from customer to customer. Market innovation improves the organization's performance because it operates at a lower cost as there is no need for inventing anything new. The study recommended that the organizations develop winning products, which are products that are in an appealing market, target a profitable customer segment, address the suitable unmet needs, and assist customers in getting the job done better than any competing solution. The organization should aim their marketing innovations to better address customer needs, open up new markets, or newly positioning a firm's product on the market to increase its sales. Keywords: Product innovation, service innovation, marketing innovation, performance, insurance brokerage companies, Nairobi County, Kenya