WORKING CAPITAL MANAGEMENT AND PERFORMANCE OF PUBLIC SERVICE VEHICLES INSURANCE COMPANIES IN KENYA

The study examined the impact on the performance of insurance companies in Kenya using working capital management practices. The allocation of work assets is of major importance to the success of the organization. A moderate and vigorous style of working capital administration can be embraced by an organization. If working capital is poorly managed, funds are inappropriately linked to idle assets that lower the corporation's liquidity and vice versa. Efficiency in the allocation of job assets thus impacts not only short-term sales financial performance, but also long-term financial performance. The overall goal of this report was to evaluate the effect of working-capital management on the quality of Public Service Vehicle insurance undertakings, with specific objectives; examine the influence on the accomplishments of Public Service insurance undertakings in cash management practices; and measure the impact on the performance. A Causal research design was used. The research took place in the city of Nairobi at the offices of Amaco, Invesco, Direct Line and Explico, respectively. The target audience composed of 62 voters, consisting of four financial managers and 32 insurance companies, 17 accountants and 9 internal auditors. The scientist used a stratified random sampling technique utilizing Yamane's (2009) with a sample size of 51 respondents. Both Primary data and secondary data was collected using questionnaires and data collection schedules and presented by tables . Descriptive statistics and inferential statistics were used to analyse collected data. Results showed that there was a positive relationship between the influence of cash management, accounts receivable management and accounts payable on PSVs insurance companies performance. This means that cash, accounts receivable and accounts payable management are determinants of working capital. From the regression model, (R2 = .829) shows that all the predictors account for (84.2%) variation in performance of Public Service insurance companies. The study showed a positive relationship between working capital management and performance of the Public Service Vehicle insurance companies. The study thus recommends that for PSVs insurance companies to improve performance they should adopt a cash and carry model for premium payments and invest in fraud claim prevention to control their accounts payables.