Abstract
The article sought to review the contemporary challenges and their policy interventions in the Kenyan insurance industry in terms of the external and internal challenges affecting the insurance business and which require leadership and managerial actions. The researcher reviewed the contemporary challenges and the performance of insurance companies in Kenya by looking at the external business environmental challenges and how they affect the management of Insurance companies. Secondly, the study considered how Kenyan insurance companies adapt and adjust their internal practices and processes to satisfy the changing customer expectations. The article goes further to review the critical policy issues which are required to address: changing consumer dynamics, enforce strict compliance with the stringent regulations, constant product innovations, and greater need for communication, technological disruptions, on-demand marketplace, and compensation. Using peer-reviewed literature and the published integrated annual reports of Jubilee Insurance Company Ltd; the study discussed and highlighted the policy interventions in relation to the demands of business and customers. Using Jubilee Insurance as a model insurance company in a case study, the researcher found that by combining performance driven behaviour and regular use of management control systems, Insurance Companies were able to post improved results. The Choice of Jubilee was driven by its size and stability among the Kenyan insurance companies. Jubilee has adopted an integrated reporting system which enabled the researcher to obtain the empirical information required from a secondary source. The researcher reviewed the data from the company’s integrated annual reports for the ten years from 2007 to 2017. The study looked at the control systems, including informal and formal controls and subjected these controls to a more comprehensive analysis to establish the impact of management control systems and strategy on the insurance company performance. The study suggested further empirical research to find the linkage between the policy interventions to various challenges and the performance of the insurance companies in Kenya.
Highlights
In today‟s global business environment, organizations are constantly looking for ways to expand and improve their business outcomes through improved processes and adaptation of new business models
The purpose of this study is to explore the policy interventions put in place to respond to extant contemporary challenges in the Kenyan Insurance Industry and its impact on organization performance
This study emphasises the new approaches of managing companies with the focus on future survival in a business environment which is becoming more turbulent, unpredictable and where business models are never static and where businesses and markets are complex adaptive systems, using complexity theory to increase understanding of how to cope in complex and turbulent environments, this area has not been widely researched in Kenya making it an area of interest especially in a time insurance companies are complying with regulations relating capital adequacy requirements and international reporting standards (i.e., IFS 9 and 17 and Solvency II requirements)
Summary
In today‟s global business environment, organizations are constantly looking for ways to expand and improve their business outcomes through improved processes and adaptation of new business models. Majority of the insurance market players are advancing their business processes to cope with increasing business demands and to stay competitive in a business environment which is fast changing and which is unpredictable. In the opinion of Hoyt and Liebenberg (2011), insurance operates on a principle of sharing the losses of a few among the many policyholders offering protection and peace of mind against the risk of loss to the policyholders. The insurers must adapt within this challenging socio-economic environment for the business model of insurance that necessitates investment returns so as to pay claims and generate a profit for shareholders
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