The Determinants of Financial Performance in General Insurance Companies in Kenya

Citation:
M.Mwangi, J.Wanjugu. "The Determinants of Financial Performance in General Insurance Companies in Kenya." European Scientific Journal. 2015;11(1):288-297.

Abstract:

The contribution of the general insurance industry in Kenya to thegross domestic product is at 2.08%. This is low and hence the need toestablish factors that can influence improved performance of some of the keyplayers – the general insurance companies. The study was therefore toestablish the factors that affect the profitability of general insurers in Kenya.The study employed multiple linear regression, with return on assets as thedependent variable, and considered all the general insurance companies inKenya for the period 2009-2012. Profitabilitywas positively related toleverage, equity capital, management competence index and negativelyrelated to sizeand ownership structure. The study did not find a relationshipbetween performance and retention ratio, liquidity, underwriting risk andage. The study recommends that for general insurers in Kenya to performbetter they should increase leverage, equity capital and quality of staff.

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