Asian Journal of Economics, Finance and Management

Insurance plays a central role in supporting business investment, infrastructure development, and financial sector stability, all of which contribute to economic growth. Despite this importance, Kenya’s general insurance industry continues to experience slow expansion, largely attributed to intense competition and weak firm-level characteristics. This study examined how selected firm-specific factors, equity, leverage, liquidity, and operational efficiency, influence the growth of general insurance companies in Kenya. The study targeted all 36 insurance companies regulated by the Insurance Regulatory Authority and applied a quantitative longitudinal research design. Financial data from 2016 to 2024 were extracted from audited annual reports and analysed using panel regression, supported by diagnostic tests to validate model robustness. Results were presented through tables, charts, and graphs. Findings indicated that equity and operational efficiency exerted strong and positive effects on firm growth, highlighting the importance of adequate capitalisation and streamlined operations. Leverage demonstrated a moderate influence, while liquidity emerged as an essential determinant of growth. The study further established that Gross Domestic Product (GDP) significantly moderated the relationship between firm characteristics and growth, amplifying positive effects during periods of economic expansion and constraining growth during economic downturns. Correlation analysis showed positive associations between firm growth and equity (r = 0.612), liquidity (r = 0.395), operational efficiency (r = 0.544), and GDP (r = 0.486), while leverage was negatively related (r = –0.428). All coefficients were below 0.80, confirming the absence of multicollinearity. The study recommends strengthening capital structures, prudent debt management, maintaining adequate liquidity levels, and enhancing operational efficiency. Aligning strategic growth initiatives with prevailing macroeconomic conditions is also emphasised. Future studies should broaden the scope of firm-level determinants, incorporate economic cycle variations, and undertake sectoral or cross-country comparisons to enrich the understanding of growth dynamics in the insurance industry.