Abstract:
Extensive research exists on the strategies applied by insurance firms to improve their
performances. Very few of these studies focus on the growth strategies applied by these firms
within the insurance industry. The general objective of this study was to investigate the influence
of the growth strategies on the performance of firms in insurance industry in Kenya. The study
investigated how the Diversification strategy, Market penetration strategy, Market development
strategy, Product development strategy and the moderating effect of ownership structure have
contributed to the performance of firms within the insurance industry. The target population of
the study were all the 5,188 insurance players in Kenya as on 2013. The study adopted a
descriptive research design. A random stratified sampling was used to select 125 respondents.
Data was collected using self-administered structured questionnaire as well as from the
secondary sources. The response rate was 83%. Data was analyzed using both descriptive and
inferential statistics. Study found that the growth strategies have positive influence on the
performance of the insurance firms within the insurance industry in Kenya except the market development strategy. The moderating effect of the ownership structure was also noted to have
a positive effect in the performance of the firm. The study recommends that as number of firms
in the insurance industry increases, it is only those who choose to pursue the growth strategies
will have better performances. Firms are strongly warned against expanding and opening
branches (Market development) because in the long run these branches do not create value to
the shareholders.
