Product innovation strategy and micro insurance penetration in Embu County, Kenya.

The insurance penetration rate in Kenya remains consistently low, currently at about 2.43%. To tackle this issue, insurance companies have adopted various strategies to make their products more appealing to the target market. This study examined the influence of product innovation strategy on micro insurance penetration in Embu County, Kenya, guided by the diffusion of innovation theory. A descriptive research design was used, focusing on all 11 insurance companies operating in Embu County, which served as the unit of analysis. The study included 6 respondents from each insurance company, comprising branch managers, underwriters, agency managers, marketing team leaders, accountants, and customer relationship managers, resulting in a total of 66 respondents. Data was verified for completeness, coded, and analyzed using SPSS. Both descriptive and inferential analysis methods were applied, with the results presented in tables. The descriptive findings indicated that product innovation strategies significantly influenced microinsurance penetration. Correlation analysis revealed a strong positive relationship (r=0.725**; p=0.000), suggesting that product innovation strategy has a significant influence on microinsurance penetration. Regression analysis showed an R² value of 0.526, meaning that 52.6% of the variation in microinsurance penetration is explained by product innovation strategy. The study concludes that product innovation plays a crucial role in enhancing microinsurance penetration. It recommends that insurance companies customize microinsurance products and bundle them with other financial services to increase customer value and drive higher penetration rates.