Risk Management Strategies and Performance of Insurance Companies in Kenya

Purpose: The purpose was to study the effect of risk management practices on the insurance companies performance in Kenya. The objective of the study was to assess the effect of the risk management practices on the performance of firms in the insurance industry. Methodology: The study embraced descriptive survey design. This study’s target population comprised of all the 56 insurance firms in Kenya that are duly registered, licensed and regulated by the IRA. Since the number of insurance firms are few, this study proposed to use census survey and it purposively used underwriting managers as a source of crucial information for the study. This study relied on both primary and secondary data. Data was analyzed using the Statistical Package for Social Sciences (SPSS) version 26. Quantitative data was analyzed using descriptive statistics including frequency, percentages and means, summary graphs, pie charts and frequency distribution tables was employed. This study also conducted inferential statistics through correlation analysis. The study results was presented through use of tables and figures. Findings: The study found out that revealing that all four strategies significantly enhance financial stability, profitability, and operational efficiency, with Risk Reduction Strategy having the strongest effect. Unique Contribution to Theory, Practice and Policy: To strengthen performance, firms should adopt structured risk assessment frameworks, invest in predictive analytics, enhance loss prevention programs, and expand risk transference mechanisms such as reinsurance partnerships. Additionally, fostering a strong risk management culture through employee training and regular strategy reviews is essential for long-term sustainability. The study recommends further research on the role of technological advancements, regulatory compliance, and economic factors in risk management, as well as the impact of policyholder behavior on insurance firms’ financial resilience and market competitiveness.