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Cited by 7Insurance and Financial Risk ManagementCorporate Finance and GovernanceFinancial Analysis and Corporate Governance

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Financial Performance of Insurance Firms. Does Leverage and Liquidity Matter? Evidence from Kenya

Open access
Maina Kamau, Alex, Olweny, Tobias, Mwangi Muturi, Willy·2021·Eastern Journal of Economics and Finance
DOI 10.20448/809.6.1.1.14
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Abstract

The purpose of this study was to investigate the influence of firm attributes on the financial performance of insurance firms in Kenya. The study was anchored on trade off theory. The research philosophy adopted was positivism while the correlation research design was adopted. The study used secondary data which was collected using data collection sheet from Insurance Regulatory Authority (IRA), Association of Kenya Insurers (AKI) and individual firms’ websites. The target population of the study was 52 insurers that operated in Kenya for the ten years (2010-2018). The unbalanced panel data was analyzed using Random and Fixed effect model where Hausman test was used to establish to test the hypothesis. The study found that leverage and liquidity had a significant negative effect on financial performance of insurance firms in Kenya. The study recommends that insurance firms to embrace feasible financial leveraging strategies that can boost firm profitability. Also, they need to conduct effective liquidity management to maximize the value of the company and its financial performance.

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Citations

Cites

Research works printed but not linked: 24

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Metadata

Authors
Maina Kamau, A., Olweny, T., & Mwangi Muturi, W.
Affiliations
Jomo Kenyatta University of Agriculture and Technology (KE)
ORCID
Olweny, Tobias
Venue
Eastern Journal of Economics and Finance
Publisher
Online Science Publishing
Published
2021
Volume
6
Issue
1
Pages
1-14
ISSN
2305-9095 (ISSN-L)
DOI
10.20448/809.6.1.1.14
OpenAlex
W3176885322
Cited by
7
References
36
Citations by year
2025: 3 · 2023: 2 · 2022: 2
FWCI
0.76
Type
journal article
Language
en
Open access
Locations
  • Eastern Journal of Economics and Finance (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Insurance and Financial Risk Management
  • Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
Keywords
insurance companies, financial performance, leverage, liquidity, trade-off theory, liquidity management, Kenyan insurance industry

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