Influence of Knowledge Management Capabilities on Performance of Insurance Firms in Kenya

Abstract

The research main objective was determination of the influence of knowledge management capabilities on performance of Kenyan insurance firms. The research was guided by the following objectives; establishing knowledge acquisition influence on performance of insurance firms in Kenya; determination of the influence of knowledge application on performance of Kenyan insurance companies and establishing knowledge protection influence on performance of insurance firms in Kenya. This research made use of descriptive research design in establishing the effects of knowledge management capabilities on performance of Kenyan insurance companies. The independent variables included knowledge acquisition, knowledge application and knowledge protection, and their implications on the performance of insurance firms in Kenya as the dependent variable. The target population consisted of each of Kenya's 56 insurance companies. The head of strategy, information technology, risk management, and human resources in every Kenya's insurance companies served as the study's observational unit. A total of 224 respondents were included in the sample courtesy to the 4 respondents per insurance company. A questionnaire was utilized to collect respondents' primary data. Five-point Likert-type scales, varying from one (the lowest level) to five (the highest point) were included in the survey. Background data were analyzed using descriptive statistics. Utilizing percentages and frequencies, the respondents' demographic profiles were examined. The connection between the independent and dependent variables was ascertained using correlation and regression analysis of inferential statistics. In regards to knowledge acquisition and organization performance at the insurance firms in Kenya, the findings revealed that management encourages distribution of acquired knowledge to different departments through electronic or print media. Descriptive findings further revealed that knowledge creation is an integral part of every organization staff and that the firm encourages knowledge sharing between different departments to create a competitive advantage. Lastly, the findings revealed that sharing of knowledge within the organization leads to creation of a pool of experienced staff and this leads to innovation. The correlation as well as regression results discovered that knowledge acquisition possessed substantial positive impact on organization performance (β=0.509, p=0.000). The findings of the study in regards to knowledge application and organization performance established that application of new information results in invention in the business and creation of new and unique products in the market. In addition, the descriptive results revealed that new designs as a result of acquired knowledge lead to inventions of new markets and customers. Finally, findings showed that new products as a result of knowledge application lead to increased sales volumes. The correlation as well as regression outcomes discovered knowledge application possessed a positive as well as substantial impact on organization performance (β=0.311, p=0.000). Findings relating to knowledge protection and organization performance established that patenting inventions has increased competitive advantage in the market and that every staff has a password which they use to log in to the system. Additionally, findings discovered that the insurance firms have copyright protections of their knowledge and technology which protects the firms from competitors copying the innovations whereas password protection in the system helps to prevent unauthorized access to the systems. Lastly, the findings revealed that the insurance firms have patents on their inventions and this helps them avoid legal suits. Correlation and regression analysis results showed that knowledge protection had a positive impact on organizational performance among Kenyan insurance enterprises (β=0.883, p=0.000). According to the study's findings, knowledge application significantly and positively impacts organization performance, knowledge protection positively and significantly affects organization performance of insurance firms in Kenya, and knowledge acquisition positively and significantly affects organization performance. The study also comes to the conclusion that knowledge management skills significantly and positively affect the performance of Kenyan insurance companies. The study recommends that the management of insurance firms in Kenya should consider enhancing their knowledge acquisition such as knowledge creation and sharing as this will improve overall firm performance. The research urges policymakers to create laws that allow for the application of knowledge. Finally, the study recommends the need for insurance firms to harness a knowledge protection culture. Future studies should consider conducting a study of knowledge management capabilities in other sectors.