CORPORATE RESTRUCTURING AND CUSTOMER SATISFACTION IN LIFE INSURANCE COMPANIES IN KENYA
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Date
2025-09
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THE CATHOLIC UNIVERSITY OF EASTERN AFRICA
Abstract
Life insurance companies in Kenya face significant challenges in maintaining customer satisfaction. Major insurers have struggled to balance operational restructuring with customer service excellence. For instance, Kenya's life insurance sector recorded customer satisfaction levels of only 65% compared to the industry standard of 80%, while customer retention rates varied significantly across companies, reflecting ongoing pressure on service delivery during
restructuring periods. This study aimed to ascertain how corporate restructuring affected client contentment with life assurance providers in Kenya. The study sought to determine the effect of financial restructuring on customer satisfaction, establish the effect of portfolio restructuring on consumer satisfaction, ascertain how operational process reorganization affects customer satisfaction, and establish how regulatory compliance mediates the link between restructuring and
customer satisfaction. The study was anchored on five theoretical frameworks: Dynamic Capabilities Theory, Trade-Off Theory, Institutional Theory, Expectancy-Disconfirmation Theory, and Social Cognitive Theory. These associations were investigated using a descriptive study methodology. The target population consisted of 3,094 employees across different hierarchical levels at 23 licensed composite life insurance companies in Kenya, including Senior Managers (135), Middle Managers (434), and Agents (2,525). Stratified random sampling was used to select 200 respondents proportionally distributed across the three categories. The study utilized structured questionnaires for primary data collection, achieving a response rate of 93.5% with 187 usable responses. Data analysis employed quantitative analysis with the use of inferential and descriptive statistics, including SPSS software, including multiple regression analysis,
correlation analysis. Customer satisfaction was positively correlated with all restructuring variables, according to the correlation study: operational process restructuring (r = 0.685, p < 0.01), portfolio restructuring (r = 0.628, p < 0.01), financial restructuring (r = 0.542, p < 0.01), and regulatory compliance (r = 0.476, p < 0.01). Multiple regression analysis indicated that the three restructuring dimensions explained 57.4% of the variation in customer satisfaction (R² = 0.574). The results of the regression model were statistically significant (F = 82.347, p < 0.001), and every variable had a good and substantial impact: operational process restructuring (β = 0.389, p <0.001), portfolio restructuring (β = 0.234, p < 0.001), and financial restructuring (β = 0.156, p <0.05). Mediation analysis confirmed that regulatory compliance partially mediated how business transformation and consumer happiness are related, with the direct result decreasing from β =0.793 to β = 0.649 when the mediator was included. The study concluded that operational process restructuring has the strongest influence on customer satisfaction, followed by portfolio restructuring, financial restructuring, and regulatory compliance respectively. The research recommends implementing systematic operational process restructuring with customer experience focus, accelerating product innovation and diversification efforts, developing integrated financial planning frameworks that consider customer service implications, strengthening compliance management systems beyond minimum regulatory requirements, and establishing cross-functional restructuring committees to coordinate activities while minimizing customer service disruptions.
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Keywords
Digital transformation, e-commerce platforms, organizational performance, digital innovation, technology adoption, online business, Kenya