Performance of insurance firms has largely been influenced by operational factors. Insurance firms have
continually performed poorly in the Kenyan market since 1985. So far, there is still limited information as regards
this trend. The objective of the study was to establish the extent to which operational factors affect the
performance of insurance firms. The study adopted a descriptive census survey design. The study location was in
Nairobi and the population consisted of 40 registered insurance companies as at August 2010. Reliability of the
results was determined by the test-retest approach. Validity of the research instrument was established by using
two firms outside the target population. Data was analyzed using descriptive statistics and inferential statistics.
The hypothesis was tested using simple regression coefficient at 95% confidence level. The study revealed that
operational factors have no relationship with organizational performance