| dc.description.abstract | Risk "management is deemed as a core factor for business competitiveness. “It facilitates a firm to
develop a unique strategy to minimize the potential losses and open a door for the exploitation of
new opportunities. In recent years, insurance companies have increased their focus on risk
management. Insurance companies are in the risk business and as such cover various types of risks
for individuals, businesses and companies. The general objective of this study was to establish the
influence of risk management processes on financial performance of insurance firms in Kenya.
The specific objectives assessed the influence of risk management planning, risk identification,
risk analysis and risk monitoring on the performance of insurance firms in Kenya. The study was
anchored on Risk Management Theory. Other theories included, Agency theory and contingency
planning theory. The target population of the study was 56 insurance firms. The unit of observation
in the insurance firms were the risk managers and accountants. Primary data was collected by
means of a structured questionnaire. The data was analyzed using descriptive and inferential
statistics. The study conducted normality test, multicollinearity and heteroscedasticity tests. A
regression model was used to test the influence of risk management processes on performance.
The hypotheses developed by the study were tested at 5% significance level. Findings revealed
that there was a significant effect of risk management processes on the financial performance of
insurance firms in Kenya. Risk management planning had a positive and significant effect on
financial performance of insurance firms in Kenya. Risk identification process had a positive and
significant effect on financial performance of insurance firms in Kenya. Risk analysis had a
negative and insignificant effect on financial performance of insurance firms in Kenya. Risk
monitoring had a positive and significant effect on financial performance of insurance firms in
Kenya. To keep abreast with the changing economic times, insurance firms need to be vigilant on
the measures they take so as to be able to minimize risk exposure. The study recommended that
insurance firms should practice risk management strategies in order to boost their performance
either in a financial or operational perspective. Moreover, an establishment of comprehensive risk
management of insurance firms should be made a prerequisite as it contributes to the overall risk
management systems. This study provides useful information to practitioners and academics who
are interested in identifying the various risks that insurance firms in Kenya often face. This would
go a long way in mitigating the risks before they occur. | en_US |
