Corporate Social Responsibility and Competitive Advantage of Insurance Firms in Nairobi City County, Kenya

Problem Statement: Insurance firms in Nairobi City County, Kenya have been characterized by low market penetration levels, poor customer responsiveness, inadequate product or service differentiation and dwindling market share. To remain relevant and continue with their operations into the foreseeable future, these insurance firms need to implement structured corporate social responsibility initiatives to attract new customers, expand their market reach, and provide innovative, non-imitable products and services to meet the dynamic customer needs. Purpose of Study: The study examined the effect of corporate social responsibility on the competitive advantage of insurance firms in Nairobi City County, Kenya. The specific objectives included establishing the effect of economic responsibility, ethical responsibility, legal responsibility, and philanthropic responsibility on the competitive advantage of insurance firms. Methodology: Descriptive research design and stratified sampling technique were used. The study targeted 56 insurance companies in Nairobi County, where 168 heads of public relations, heads of sales and headquarters branch managers were the respondents. Out of the 168 respondents, a sample frame of 117 managers and directors was determined using the Kothari (2004) formula, and the data were analyzed using the Statistical Package for the Social Sciences. Findings: The study found that economic responsibility (β= 0.423; p= 0.000), ethical responsibility (β= 0.117; p= 0.030), legal responsibility (β= 0.233; p= 0.000), and philanthropic responsibility (β= 0.278; p= 0.000) had a positive and significant effect on the competitive advantage of insurance firms. The study found that corporate social responsibility significantly affects the competitive advantage of insurance firms in Nairobi City County, Kenya (Adjusted R-square= 65.3%; p-value= 0.000).   Conclusion: The study concluded that economic, ethical, legal, and philanthropic responsibilities have a great significant effect on the competitive advantage of insurance firms in Nairobi City County. Recommendation: To the strategic management experts and policy makers, the study recommends a review of existing legal frameworks guiding the operations of the insurance firms to reflect the dynamic business environments in the 21st century.