Strategies Affecting Performance of Health Insurance Companies in Kenya: A Case of Jubilee Insurance Company in Nairobi

Abstract

A Research Project Report Submitted to the School of Business in Partial Fulfilment of the Requirement for the Degree of Masters in Business Administration (MBA)The general purpose of the study was to determine strategies affecting performance of Health Insurance Companies with focus on jubilee insurance. The study was guided by the below research questions: How does cost strategy affect performance in Health Insurance? How does differentiation strategy affect performance in Health Insurance? How does the focus strategy affect performance in Health Insurance? The study utilized a descriptive research design where both quantitative and qualitative research were used to gain a better understanding of the results. The primary population of study selected for this research was limited to Jubilee Insurance Company of Kenya Limited. Non-probability sampling, specifically judgment and convenience was applied in the sample selection and out of a total population of sixty-six employees; only fifty-seven operational staff were considered for the study. Primary data was collected by administering open and close-ended questionnaire to the respondents. The descriptive statistical tool, Statistical Package for Social Sciences (SPSS) and excel applications were utilized to undertake descriptive analysis by use of means, standard deviations, and frequencies. The quantitative data collected on the other hand were analysed using Anova and regression analysis to determine the relation between the performance and other variables and results was displayed by use of tables. The findings based on the first research question revealed that most of the firms are in constant pursuit of cost reduction and offer outstanding customer service. It was also established that the company’s affordable prices influence market share while cost reduction has led to a benefit from economies of scale. A regression analysis revealed that eighty nine percent of the variation in profitability was caused by the variation in the cost strategy. The findings based on the second research question revealed that most of the firms undertakes new product development, have unique products in the market and hence the unique products and services created value for consumers. The findings based on the third research question revealed that most of the firms have improved efficiency through specialization, and targeting special segment hence affecting firms’ profitability. As a result, this has enabled easy penetration into new markets as well as attracts customer attention products and service. The study concluded that for a firm to be able to perform better there is a need for organization to undertake a vigorous pursuit of cost reduction and have an operational total quality control unit. Organization should undertake new product development and value creation for consumers, specialization in special market segments, targets low priced segments, offer outstanding customer service and targeting only special segment that have potential for profitability. For further studies, the study recommends that a similar but comparative study could be considered especially between Jubilee Insurance and other insurance firms in Kenya. It is also a fact that most firms use either generic strategies as outlined by porter or a hybrid strategy, there is therefore a need to determine the impact of hybrid strategy on the firm performance and alternatively undertake a comparative analysis between the hybrid and generic strategy and how they influence performance