Abstract:
The main objective of this study was to establish the effects of claim cost settlement, commission
expenses market share, and reinsurance costs on profitability in the insurance sector in Keny a. In
spite of the sector recording significant growth in gross written premium during the period 2013
to 2017, the state of profitability remained a matter of concern:. Low solvency and liquidity ratios
could mean that the financial health of the sector was in doubt. Hence, the sector's ability to meet
'
both short-term and long-term financial commitments and obligations could be called into
question. Moreover, this could be an indicator that while companies endeavored to expand their
market shares, they gave little attention to profitability objectives. So, it was important to identify
the effects of claim costs, commission expenses, market sl111re and reinsurance costs in the
insurance sector. This study was an attempt to explore factors that had direct significant influence
on the companies' profitability for the period 2016 and 2017. ,The study drew the sample of the
study from 3 CIC insurance companies found in Embu. Qualitative primary data was collected
using questionnaires administered through a combination of judgmental and snowball sampling
methods and the response rate achieved was 35(or 28 respondents: out of the possible 66).
Quantitative secondary data was obtained from annual financial statements of the insurance
companies and the success rate achieved was 90.9% (or l 5 companies out possible 16). Collected
data was processed and analyzed by descriptive statistical techniques such as frequency
distribution tables, descriptive summary statistics, and scatter plots derived with the help or
Statistical Package for Social Sciences (SPSS version 20) to explain the nature and extent of
relationship between the dependent variable, profitability, and the independent variables: claim
