Effect Of Bancassurance On The Performance Of Insurance Companies In Kenya

Abstract

The utilization of bancassurance services has facilitated operations in insurance companies around the globe. Due to the cross-border listing of companies in Africa, bancassurance has eased the transactions of policies between the main insurance companies as well as the affiliated companies despite the distance and national restrictions. With the liberalization of the insurance sector and competition tougher than ever before, companies are increasingly trying to come out with better innovations to stay ahead of their competitors. Low insurance penetration is one of the most notable challenges facing the performance of insurance companies in terms of market share, product diversification among other measures. Therefore, the current study sought to analyze the effect of bancassurance on the performance of insurance companies in Kenya. The specific objectives of the study were to determine the effect of bancassurance in life insurance, motor vehicle and home and property products on the performance of insurance companies in Kenya. The study was hinged on theory of push and pull and market mix theory. Simple random sampling was used to draw 106 respondents from 55 insurance companies in Kenya, from whom primary data was collected with a structured questionnaire. Descriptive, correlation and regression analysis were used to analyse the data which was presented in table and figures. Results of the study revealed a positive and significant relationship between bancassurance life insurance products, motor vehicle insurance products and insurance performance while home and property insurance had positive and not significant relationship. A close focus should also be made on the specific life insurance products which is family life assurance that is favourable to many individuals otherwise the companies may put their effort in other products which are not highly purchased. Motor vehicle bancassurance more customized products need to be developed to cater for the particular market niche that may want special treatment