The financial performance of Listed Insurance Companies in Kenya's insurance industry has fluctuated significantly. This study looked into the relationship between Kenyan insurance businesses that are listed on public markets' financial performance and their financial management practices. The specific objectives included examining the impact of working capital management, capital budgeting, and capital structure on the financial performance of listed insurance companies as well as the extent to which inflation affected the relationship between financial management practices and listed insurance companies' financial performance. An explanatory research design was used. Six listed insurance companies made up the target population. In this analysis, all six listed insurance firms were considered. Because there were so few companies, a census was undertaken. Panel secondary data for the years 2015–2022 was used. Both descriptive and inferential statistics were used to analyze the data. Results indicated that high and positive association was shown between successful financial management and working capital management. High and negative correlation between capital structure and financial performance is revealed by random effects regression analysis. Capital budgeting and financial success had a positive and significant correlation. The study also discovered that the association between financial performance and financial management techniques is negatively moderated by inflation. According to the study's findings, capital structure has a detrimental effect on financial performance whereas working capital management and capital budgeting have a positive one. This study suggested that insurance companies listed at NSE should seek to maintain adequate current assets that would be enough to cater to all short-term liabilities that may arise in the course of the business operations. Insurance firms should also seek to balance the use of debt financing and equity financing to ensure the negative effect of high debts is neutralized. This study hence recommended that insurance firms should seek to adopt practices that will reduce the cost of investment but also increase the return on the investment. This study also made suggestions that insurance firms listed at NSE should be able to understand the economic situations in terms of inflation and make the right financial decisions that would not negatively impact their performance. The study also recommends that the IAA should provide regulations that will protect insurance firms against the effect of inflation.
Kihara et al. (Mon,) studied this question.