Effect of Mergers on Performance of Insurance Companies in Kenya, a Case of ICEA Lion Insurance Company
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 5
Abstract
Mergers in Kenya are being increasingly used for improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk and capitalizing on economies of scale for strategic positioning. Specific objectives of the study was to; examining the effect of capital base on performance of merged insurance company, the relationship between competitiveness of mergers and performance, to establish the effect of expertise on performance of merging of insurance companies and to establish effect of synergy created on performance of insurance firms. This study adopted a descriptive survey design. The target population of the study was 400 with sample of 200 that was selected randomly from five departments of ICEA LION that deem to be more linked with the immediate operations of the merged company. The sampling frame of this study was derived from the database of the insurance regulatory authority which regulates and licenses insurance firms in Kenya. Stratified sampling and simple random sampling was used. Within each study unit (department) five strata was created, while simple random sampling was used to identify respondents from the department. A Likert scale questionnaire was used to gather primary information while a secondary data collection sheet was used for collecting secondary information. Information was sorted, coded and input into the statistical package for social sciences (SPSS) version 23.0 for production of graphs, tables, descriptive statistics and inferential statistics. Findings revealed that post-merger period of ICEA LION group recorded higher premiums and a larger market share leading to improved performance. The study concluded that capital base, competitionlevel, expertise acquired and synergy created are statistically significant in improving performance of ICEA LION group. The study recommends that the firm should put in place measures to improve on its focus on the customer satisfaction through marketing and coming up with customer oriented products so that they can improve their market share hence improved performance.
Authors and Affiliations
Wilfred Ruhanga, DrAssumptah Kagiri
Keywords
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- EP ID EP411201
- DOI 10.9790/487X-2005048599.
- Views 62
- Downloads 0
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