Abstract:
Financial performance marks improvement in quantity, quality, and efficiency of financial intermediary services. The recurrent changes in the global economy, especially recession and general business environment dynamics, low market penetration and market share of insurance products, especially in the African continent, have necessitated the formation of horizontal alliance strategy. Business agreements such as those relating to alliance formation are key
business trends that have become increasingly important in recent years. The study adopted a cross-sectional descriptive survey research design and the target population was 44 insurance firms. Purposive sampling technique was used to select four respondents from each insurance company that is General Manager in charge of technical Operations, Underwriting Manager, Claims Manager and Marketing Manager giving a sample size of 176 respondents. This study used primary data obtained from administration of self-designed questionnaires. The study also used secondary data obtained from Insurance Regulatory Authority of Kenya. Descriptive statistics conducted were frequencies, percentages, means and standard deviation while inferential statistics consisted of correlation and regression analysis. The findings indicated a strong positive significant linear relationship between liquidity position and financial performance
of insurance firm’s insurance firms in Kenya. The study recommends liquidity creation, premium incomes and recapitalization as measures that can be taken to enhance insurance firm’s liquidity position which the management and policy makers should consider.
