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Purpose: To determine how Sensitivity to Risk influence Sustainability of Insurance Companies in Kenya. Methodology: The study adopted the positivist research philosophy and employed a descriptive research design. The target population was the 51 insurance companies as registered by the Insurance Regulatory Authority of Kenya (IRA) as at 31st December 2016. The study took a proportionate sample of 30 companies composed of 10 life, 15 general and 5 composite insurance companies respectively. The data analysis was by multiple regression analysis, performed to determine the relationship of the independent variable of Sensitivity to Risk and the dependent variable of Sustainability. The study used descriptive statistics such as the mean, standard deviation and frequencies to analyze the data. Further, the study applied inferential statistics such as the ANOVA and the T-test for further analysis. Study Findings: The results of the study were that Sensitivity to Risk has a positive and significant effect on sustainability of insurance companies in Kenya. The study results further concluded that the operations of the board risk committees in an insurance firm, in addition to appointment of risk champions to identify and track risks enhanced the insurance company’s sustainability. Unique Contribution: The risk based supervision regime (RBC) which came into operation in the country in 2015 is a key change in the industry, which will affect the industry players in a large way. However, the level of compliance has been quite low, as the minimum required solvency level has been set at 100% with the dates of full compliance being pushed to 2020 from the original date of December 2018. The extension of compliance date imply that most insurance companies would largely remain non-compliant during this period. The risk-based supervision, though being a step in the right direction, the model does not capture factors that enhance an insurance company’s sustainability. There are other various factors relating to agility like technological adoption and advancement in service and product innovation, which have not been included though key to a company sustainability. Further, there are a few measures adopted by companies to combat climate International Journal of Academic Research in Business and Social Sciences Vol. 1 0 , No. 5, May, 2020, E-ISSN: 2222-6990 © 2020 HRMARS 716 change but measurement and reporting of the same has not been taken care of in the current RBC framework. The IRA monitors and approves the insurance company’s staff in senior management level and directors through the ‘fit and proper’ process. In the Fit and Proper’ process of monitoring and approval, little is captured in the annual reporting or review through either a sustainability or agility index or even bringing in a management capability index. Therefore, it would be of great interest for IRA to open up the RBC model to bring in agility, sustainability and management indices.

Does Sustainability Respond to Sensitivity to Risk? The Case of Insurance Companies in Kenya