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Abstract:
Insurance players continue to struggle with the ways in which they can increase their performance and have better profits. Some tend to spread their branch network nationally or even regionally. In this regard, there is a need of research to determine whether the strategy of Market development as applied by insurance firms to improve their performances Leads to increased performance or not. The General objective of this study was be to investigate the influence of Market development and performance of firms within the insurance industry. The target population of the study were all the 5,188 insurance players in Kenya as at 2013. The study adopted a descriptive research design and used random stratified sampling frame with a sample size of 125 respondents. Data was collected using interviewer-administered structured questionnaire as well as from the secondary sources. The response rate was 83% meaning 102 respondents returned the questionnaire. Data was analysed using both descriptive and inferential statistics on both the independent (Market Development strategy) and dependent (performance of firms) variables. The findings of the study were that market development strategy does not improve the performance of firms. The study recommends that as number of firms in the insurance industry increases, it is only those who choose to pursue the 'other' growth strategies will have better performances. Firms are strongly warned against expanding and opening branches (Market development) because in the long run these branches do not create value to the shareholders.
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