Does Financial Technology influence Financial Performance? Assessment of the Kenyan Insurance Service Sector

Abstract

Purpose – The purpose of the study was to assess the effect financial technology on financial performance of insurance companies in Kenya.

Methodology - The study was conducted through explanatory research design. The study population comprised of 56 registered insurance companies as per IRA (2021). Since the population was small, a census was considered for this study. Primary data was collected by a semi-structural questionnaire sent through emails and hand delivery as secondary data was gathered for five years from 2017-2021 from Insurance regulatory authority and individual insurance companies. Correlation to test the strength and direction of the relationships was conducted and regression analysis was run to establish the causal effects and data was presented in tables and figures.

Findings – Based on the findings, it was established that financial technology does have a significant but adverse effect on financial performance of insurance companies in Kenya

Implications - Findings of this study are beneficial to managers and scholars by offering direction in the managerial practice, policy and contributing to theoretical discourse. Based on findings of the study objective that indicated that financial technology has significant but adverse effect on financial performance, it is recommended that insurance companies should conduct a sensitization on its mode of delivery particularly financial technologies available and how the customers can access them with ease to reap maximum benefits from costs of financial technology taken by companies. In order for them to gain an understanding and appreciate the financial technology and essence of having the financial technology and its benefits should start with the internal stakeholders.

Keywords: Financial technology, Financial Performance, Kenyan Insurance Service Sector