| dc.description.abstract | Insurance firms are fundamental in managing risk in an economy. Survival of these firms is pegged on firm characteristics and financial performance keeping them afloat from surging claim costs. Reviewed literature confirms negative performance indicators some of which end-end up in closure of some once registered insurance farms which once did well. A robust business environment is sustained through financially sound insurance subsector. This study sought to establish the influence of identified firm characteristics on financial performance of insurance firms listed at the NSE. Specific objectives of the study were: 1) to determine the influence of firm size on financial performance of listed insurance firms at the NSE, 2) to establish the influence of capital adequacy on financial performance of listed firms at the NSE, 3) to determine the influence of claim costs on financial performance of listed insurance firms at the NSE, 4) to assess the influence of capital structure on the financial performance of listed firms at the NSE, 5) to determine the moderating influence of firm age on the relationship between firm characteristics and financial performance of listed firms in the NSE. The study period 2009 to 2018 captures a declining trend in financial performance within the insurance subsector in Kenya. The study was anchored on Agency theory and supported by Pecking Order theory, and Modigliani and Miller Irrelevance theory. The study adopted a longitudinal design on all six listed insurance firms at the NSE. Secondary data was collected from the Audited financial statements. The study employed panel data, multiple regression analysis and spearman’s correlation coefficient. Findings indicated that capital structure had the highest positive and significant influence on financial performance of listed insurance firms while claim costs had a negative correlation with financial performance of the listed firms. Firm age significantly moderated the relationship as it determined cash flows of the listed firms. The study contributes to management practice by enhancing loss provisioning of insurance firms to curb unwarranted liquidity constraints. The study recommends future research of a similar nature through mixed methods incorporating primary data captured from claims managers. | en |
