Differentiation strategies and performance of insurance companies in nairobi, Kenya

In Kenya, the present operational set up of the insurance industry is a dynamic one characterized with intense competition due to the presence of numerous insurance organizations. The implication of this is that some firms have experienced poor performance as others succeed. To guarantee survival and sustainability in the market place, firms in this industry must implement competitive strategies, such as, the differentiation strategy. However, differentiation strategy has not been examined in depth in previous studies in relation to performance of insurance firms in Nairobi County, Kenya. Therefore, the objective of the study was to establish the effect of differentiation strategy on performance of insurance companies in Nairobi, Kenya. The study was guided by Porter's Generic strategies. Descriptive survey design was adopted for the study that also targeted 1443 top, middle and lower level managers in 43 insurance companies registered in Nairobi. From these 54 managers were selected for the study using systematic random sampling. Data was collected using pretested copies of a structured questionnaire developed by the researcher were used to collect data. Data was analyzed using both descriptive and inferential statistical methods. The findings revealed that differentiation strategies significantly influenced the performance of insurance firms in the area. Therefore, the study recommends that insurance firms in the area should invest more in continuous training of their personnel to enable them understand the differentiation strategies being pursued by the firm in order to make them more effective in reaching out to the market.