Distribution Models And Performance Of Private Health Insurance Sector In Kenya

Purpose: Health insurance firms continue to compete for the same client base without registering any significant improvement in either penetration levels or performance. This study sought to establish the influence distribution models as a transient advantage on performance of private health insurance sector in Kenya. Methodology: Descriptive survey design was adopted in the study targeting a population comprising managers, assistant managers and supervisors. Four respondents were drawn from each of the five departments, namely sales, strategy, finance, operations and customer service departments in the 19 private health insurance companies where data was collected from a sample of 308 out of the 380 that were targeted. The data were analyzed and both descriptive and inferential results obtained and interpreted. Results: It was found that distribution models (β=-0.77, exp (B) =0.563, p=0.036<0.05) significantly predicted performance. Since the distribution models negatively predicted performance, it is recommended that these models be re-examined to determine their weaknesses with a view to improving them since as currently deployed, the distribution models have a negative impact on health insurance performance. Contributions to theory, policy and practice: The study recommends the employment of multiple channels of distribution of insurance product rather than relying on traditional channels of agent/broker and bancassurance. Mobile applications and internet technology could be used to make access to insurance products more convenient to access, reaching potential customers where and when they can be found while at the same time cutting on the cost of availing these services. To be able to achieve this, there will be need to invest in R&D. It is then imperative that insurance companies must have budgets for R&D. New distribution avenues like Saccos should also be pursued. Distribution channels selected must be those that enable insurance companies to achieve their profitability and penetration objectives.