1. Dr. Beatrice Ombaka, PhD. Dr.Vincent Machuki, PhD.
Resources, Innovation and Performance of Insurance Companies in Kenya
Dr. Beatrice Ombaka, PhD. Dr.Vincent Machuki, PhD.

2. Introduction and Motivation
Variation in firm performance remains unexplained even in firms in the same industry.
This has inconclusively been attributed to resources (Barney, 1986; Barney, 1991; Amit and Schoemaker, 1993).
Firms in the same industry perform differently because they differ in resources and capabilities they control even in equilibrium (Amit and Schoemaker,1993)
Resources are important for firm performance (Barney 1991; Amit and Schoemaker,1993).

3. However, resources alone can not explain variation in performance.
Role of other variables, key among them innovation.
Innovation is a crucial source of competitive advantage and survival in a given dynamic environment (Dess and Picken, 2000).
The study was anchored in RBT (Barney, 1991) DCT (Teece, Pisano and Shuen, 1997) and KBT (Michailova and Hutchings, 2006).

4. A review of related studies on organizational resources, innovation, and performance revealed gaps along conceptual and contextual fronts.
This study therefore sought to shed light on the interrelationships between resources, innovation and performance of insurance companies in Kenya.
Kenyan insurance industry is important in the economy and performance of players in the industry is critical more especially towards the realization of the Kenya Vision 2030.

5. Financial measures have limitations.
Resources owned by a firm can be configured through innovation in a dynamic environment to improve firm performance.
Performance is the main reason firms exist and should be focused on fulfilling all the constituents needs and not just shareholders.
Financial measures have limitations.
Use of comprehensive performance measurement approaches
BSC (Kaplan and Norton,1992); SBSC (Hubbard,2009)

6. LITERATURE REVIEW
Resources a firm owns and controls are considered as determinants of superior firm performance.
Resources can be tangible or intangible
Intangible resources are thought to be valuable, rare and difficult to imitate leading to a SCA (Barney, 1991).
Evolutionary theories (Nelson and Winter, 1982) suggest that firms with a strong commitment to research and development and learning will experience a higher growth rate.

7. Literature Review
Innovation is considered the ability to respond to changes in the external environment.
Dess and Picken (2000) argue that innovation is a crucial source of competitive advantage and survival in a given dynamic environment.
Cucculelli and Ermini (2012) found that product development promotes growth of firms.
Other researchers have found that availability of financial resources can expand a firm’s capacity to support its innovative activities (Lee et al., 2001).
The presence of different organizational resources and capabilities positively affects the outcome of the innovation process.

8. Hypotheses Resources have a significant influence on firm performance.
Innovation has a significant intervening influence on the relationship between resources and firm performance.

9. Research Methods Philosophy: Positivistic
Design: Cross sectional survey
Population: Census -All the 46 insurance companies
Data collection: Primary and Secondary data
Instruments: Questionnaire, Interview guide, Document review
Reliability: all items had Cronbach’s alpha coefficient of .70+
Respondents: CEO or designated officer
Unit of analysis: Organization
Analysis: descriptive , regression.
Response rate- 69.5%

10. Findings Resources and Firm Performance
Tangible resources and firm performance.
The study reported statistically significant influence of tangible resources on premium, internal business processes, environment aspect and CSR.
Statistically not significant results were observed for profit, customer perspective and learning and growth.
This indicated that, tangible resources significantly influence premium but do not significantly influence profit.
Conversely, when the composite index of tangible resources was regressed on the composite of non-financial performance measure, the results indicated an R2 of which was lower as compared to the R2 of some of the individual effect results.
This was an indicator that individually, tangible resources had a higher contribution to non-financial performance than when combined.

12. Intangible resources on firm performance
The results indicated statistically not significant results for the individual effects of intangible resources on the non-financial performance indicators except for internal business processes and corporate social responsibility.
However, when the composite index for intangible resources was regressed on the composite index of non-financial performance, the study established statistically significant influence of intangible resources on non-financial performance.
This means that the various attributes of intangible resources may not have a significant effect on non-financial performance as individual variables.
However, in combination, they had a significant influence.
Below are the findings for the influence of intangible resources on various performance indicators.

14. Intervening influence of innovation on the relationship between resources and firm performance
The results reported a statistically significant intervening influence of innovation on the relationship between organizational resources and non-financial performance of insurance companies in Kenya.
Resources alone accounted for 34.4 variation in non financial performance. Resources together with innovation accounted for 59.1 variation in non financial firm performance.
The results suggest that in the presence of innovation, organizational resources will enhance the performance of insurance companies in Kenya.
These results support the RBT and DCT views that the reconfiguration of resources in to firm specific assets and processes will enhance firm performance because the total effect cannot be duplicated by other firms.

15. Conclusion
Resources and innovation have a high explanatory power on firm performance
Theoretical implications
Strengthening RBT and DCT
Influence of specific resources on performance
Innovation is key to superior firm performance
Implications on Practice
Strengthen Research and Development
Focus on key drivers of performance

16. Conclusion Implications on Policy
Improved performance in insurance firms will help achieve Kenya Vision 2030.
R&D of new products will lead to increased insurance penetration leading to improved performance.
Recommendations
Innovation department in all insurance companies.

17. END
Thank YOU