International Journal of Research and Innovation in Social Science (IJRISS) |Volume VI, Issue XII, December 2022|ISSN 2454-6186
Effects of Digital Adoption on Performance of Insurance Companies in Kenya
Florence Mueni1, Caren Angima2*
1University of Nairobi, Kenya
2Department of Business Administration, University of Nairobi, Kenya
*Corresponding Author
Abstract: Technology, innovation and digitalization have been of benefit to a greater extent for organizations to achieve competitive advantage. Moreover, digital adoption is necessary as it enables firms to cope with changing needs of customers in the dynamic environment and has positive impacts in terms of customer satisfaction, faster service delivery, profit growth, consistency and processes improvements. The purpose of this study was to determine the effect of digital adoption on performance of insurance firms in Kenya. The specific objectives of the study were; to establish the extent of digital adoption by insurance firms and to establish the relationship between digital adoption and performance of insurance firms in Kenya. This study was guided by the technology adoption theory and the innovation diffusion theory. The study used descriptive research design and a census approach was adopted to target all the 54 insurance firms in Kenya as at December, 2020. Descriptive statistics were used to determine the extent of digital adoption in line with process, product and service while inferential statistics was undertaken using a regression analysis. The study established that there is a relationship between digital adoption and performance of insurance firms in Kenya, with digital adoption positively and significantly influencing performance of the insurance firms. The study concludes that digitalization enables the insurance firms to upgrade their processes, make product improvements and discharge quality services to their clients. The study recommends that insurance firms continually invest in technology and keep up with new innovations in order to enhance processes, products and service delivery to customers in order to improve company performance.
Keywords: Digital adoption, Innovation, Firm Performance, Insurance Companies
I. INTRODUCTION
Technology, innovation and digitalization have been of benefit to a greater extent for organizations to achieve their competitive advantage their adoption is necessary as the environment is dynamic, consumer needs keep on changing and firms are forced to find ways to cope with these in order to survive and remain competitive. (Mwangi, 2018). The main drivers of digitalization include technology, leadership and innovation, efficiency, effectiveness, speed agility and customer ownership. The insurance sector is a driver of economic growth through provision of safety, financial stability and development. It is a social device that minimizes or eliminates risk of loss to life and property. It also reduces effects of loss of earning power, legal liability and unexpected expenses. Although insurance companies have generally