THE NIGERIAN INSURANCE INDUSTRY COMPETITIVE ADVANTAGE: THE ROLE OF INNOVATION CAPABILITY
Abstract
Emerging technologies have given rise to greater opportunities within the insurance sector with innovations upturning the traditional business model. This study examined competitive advantage and the relationship with innovation capability in Nigerian insurance sector. Employing a cross sectional research design, the study utilised primary data obtained from selected insurance companies through the use of a structured questionnaire. Multistage sampling technique was used and data collected was analysed using regression analysis. The findings revealed innovation capability had a significant influence on competitive advantage. The study concluded that there was a need to pay attention to this capability with a capacity to boost the activities of the industry and recommendations were made.
Keywords
Full Text:
PDFReferences
Aas, T. H., & Breunig, K. J. (Eds.). (2017). Innovation Capabilities: Affirming an Oxymoron?. Fundation for the Dissemination of Knowledge and Science" Cognitione".
Abongo, B., Mutinda, R., & Otieno, G. (2019). Innovation capabilities and process design for business model transformation in Kenyan insurance companies: A service dominant logic paradigm. Journal of Information and Technology, 3(1), 15-45. Retrieved from http://stratfordjournals.org/journals/index.php/Journal-of-Information-and-Techn/article/view/297
AIO. (2018). Africa insurance barometer: Market survey. African Insurance Organisation, 1-49. Retrieved from: http://turnkeyafrica.com/africa-insurance-barometer-2018/
Alsamydai, M. J., Alnawas, I. A. M., & Yousif, R. A. (2010). The impact of marketing innovation on creating sustainable competitive advantage: The case of private commercial banks in Jordan. Asian Journal of Marketing, 4, 113-130.
Anand, M., & Monin, P. (2013). Innovation processes in emerging markets: Empirical evidence from the Indian insurance industry. Management International, 18(1), 40-57.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.
Barney, J. B., & Clark, D. N. (2007). Resource-based theory: Creating and sustaining competitive advantage (1st ed.) Oxford University Press on Demand
Barney, J. B., & Hesterly, W. S. (2009). Strategic management and competitive advantage. Upper Saddle River, NJ: Pearson Education.
Bell, M., & Figueiredo, P. N. (2012). Innovation capability building and learning mechanisms in latecomer firms: Recent empirical contributions and implications for research. Canadian Journal of Development Studies/Revue canadienne d'études du développement, 33(1), 14-40.
Calantone, R. J., Cavusgil, S. T., & Zhao, Y. (2002). Learning orientation, firm innovation capability, and firm performance. Industrial marketing management, 31(6), 515-524.
Cassiman, B., & Golovko, E. (2011). Innovation and internalization through exports. Journal of International Business Studies, 42(1), 56-75.
Cavusgil, S. T., Calantone, R. J., & Zhao, Y. (2003). Tacit knowledge transfer and firm innovation capability. Journal of Business & Industrial Marketing, 18(1), 6-21.
Chadha, A. (2009). Product cycles, innovation and exports: A study of Indian pharmaceuticals. World Development, 37(9), 1478-1483.
Chatterji, A., Glaeser, E., & Kerr, W. (2014). Clusters of entrepreneurship and innovation. Innovation policy and the economy, 14(1), 129-166.
Chaudhry, B., & Verma, P. K. (2016). Technological innovation capabilities: a critical review. International Journal of Latest Technology in Engineering, Management & Applied Science, 5(4), 95-101.
Chen, L., Zhou, Y., Zhou, D., & Xue, L. (2017). Clustering enterprises into eco-industrial parks: Can interfirm alliances help small and medium-sized enterprises?. Journal of Cleaner Production, 168, 1070-1079.
Christensen, K. & Fahey, L. (1984). Building distinctive competencies into competitive advantage. Strategic Planning Management, 2(1), 113-123.
Czerniak, J., & Klapkiv, L. (2018). Innovations on the insurance market: Patents in underwriting. Handel Wewnetrzny, 6, 151-163.
Desai, A. V. (1984). India's technological capability: An analysis of its achievements and limits. Research Policy, 13(5), 303-310. Retrieved from: https://ideas.repec.org/a/eee/respol/v13y1984i5p303-310.html
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: what are they?. Strategic Management Journal, 21(10‐11), 1105-1121.
Ernst & Young (2015). Sustaining growth and innovation in the insurance sector. Insurance Governance Leadership Network Summit, November 2015. Retrieved from https://www.ey.com/Publication/vwLUAssets/EY-igln-summit-sustaining-growth-and-innovation/$FILE/EY-IGLN-Summit-Sustaining-growth-and-innovation.pdf
Gera, P., Costonis, M., Sandquist, E., Bramblet, J., & Secchi, A. (2018). Insurance as a living business: Explosive growth. Accenture. Retrieved from https://www.accenture.com/t00010101T000000Z__w__/ar-es/_acnmedia/PDF-72/Accenture-Insurance-Living-Business-POV.pdf
Gloet, M., & Samson, D. (2016). Knowledge management and systematic innovation capability. International Journal of Knowledge Management, 12(2), 54-72.
Gnatzy, T., & Moser, R. (2012). Scenario development for an evolving health insurance industry in rural India: INPUT for business model innovation. Technological Forecasting and Social Change, 79(4), 688-699.
Gunday, G., Ulusoy, G., Kilic, K., & Alpkan, L. (2011). Effects of innovation types on firm performance. International Journal of production economics, 133(2), 662-676.
Hagen, C., Hales, M., Reifel, J., Pei, A., & Miller, J. (2009). Technology: the insurance industry’s pivot point. A.T. KEARNEY, 1-7.
Hill, L. A., Brandeau, G., Truelove, E., & Lineback, K. (2015). The capabilities your organization needs to sustain innovation. Harvard Business Review, 1-9.
Hwang, W., Choi, H., & Shin, J. (2020). A mediating role of innovation capability between entrepreneurial competencies and competitive advantage. Technology Analysis & Strategic Management, 32(1), 1-14.
Iddris, F. (2016). Innovation capability: A systematic review and research agenda. Interdisciplinary Journal of Information, Knowledge, and Management, 11, 235-260.
IIF. (2016). Innovation in insurance: How technology is changing the industry. Institute of International Finance, pp. 1-12. Retrieved from https://www.iif.com/Publications/ID/1246/Innovation-in-Insurance-How-Technology-is-Changing-the-Industry
Katz, J. (1984). Domestic technological innovations and dynamic comparative advantage. Journal of Development Economics, 16(1/2), 13-37.
Kimani, M., & Juma, W. (2015). Assessment of strategies for gaining competitive advantage in insurance firms in Thika Town, Kenya. International Journal of Economics, Commerce and Management, 3(2), 1305-1316.
Klapkiv, L., & Klapkiv, J. (2017). Technological innovations in the insurance industry. Journal of Insurance, Financial Markets and Consumer Protection, 26(4/2017), 67-78.
Kottmann, D., & Dordrechter, N. (2018). Insurtech caught on the radar hype or the next frontier? Oliver Wyman/Policendirekt, Global Insurtech Report, 1-52. Retrieved from https://www.oliverwyman.com/our-expertise/insights/2017/may/InsurTech-caught-on-the-radar.html
Lall, S. (1992). Technological capabilities and industrialization. World development, 20(2), 165-186.
Lambert, S. C., & Davidson, R. A. (2013). Applications of the business model in studies of enterprise success, innovation and classification: An analysis of empirical research from 1996 to 2010. European management journal, 31(6), 668-681.
Lehman, M. (2017). How will insurtech influence claims?. Accenture Insurance Blog, 1-4. Retrieved from insuranceblog.accenture.com
Lerro, A., Linzalone, R., & Schiuma, G. (2014). Managing intellectual capital dimensions for organizational value creation. Journal of Intellectual Capital, 15(3), 350-361.
Li, S., Ragu-Nathan, B., Ragu-Nathan, T. S., & Rao, S. S. (2006). The impact of supply chain management practices on competitive advantage and organizational performance, Omega, 34(2), 107-124.
Mahdi, O. R., Nassar, I. A., & Almsafir, M. K. (2019). Knowledge management processes and sustainable competitive advantage: An empirical examination in private universities. Journal of Business Research, 94, 320-334.
Maina, M. N. (2016). Effect of innovation strategies on the performance of insurance firms in Kenya. Unpublished Master of Science in Entrepreneurship and Innovations Management thesis, University of Nairobi. UON Repository.
Massey, B. L. (2016). Resource-based analysis of the survival of independent web-native news ventures. Journalism & Mass Communication Quarterly, 93(4), 770-788.
Mathur, D., & Tripathi, A. S. H. I. S. H. (2014). Factors influencing customer’s choice for insurance companies: A study of Ajmer City. IOSR Journal of Business Management, 16(2), 35-43.
McGrath, R. G. (2010). Business models: A discovery driven approach. Long range planning, 43(2-3), 247-261.
Mudaly, N. A. (2017). Business model innovation: the drivers, enablers and inhibitors of firms facing disruptive change (Doctoral dissertation, University of Pretoria). Retrieved from: URI: http://hdl.handle.net/2263/59891
National Insurance Commission (NAICOM) 2019. Retrieved from https://www.naicom.gov.ng
NIA (2019). 2018 Nigeria Insurers Digest
OECD. (2005). OECD science, technology and industry scoreboard, OECD, Paris. Retrieved from https://www.oecd.org/sti/scoreboard.htm
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource‐based view. Strategic Management Journal, 14(3), 179-191.
Peteraf, M. A., & Barney, J. B. (2003). Unravelling the resource-based tangle. Managerial and Decisions Economics, 24(4), 309-323.
Porter, M. E. (1985). Technology and competitive advantage. Journal of Business Strategy, 5(3), 60-78.
Porter, M. (1996). What is strategy? Harvard Business Review, 74(6), 61-78.
PwC (2015). Africa insurance trends. Retrieved from https://www.pwc.com/ng/en/assets/pdf/nigeria-insurance-survey.pdf
Rajapathirana, R. J., & Hui, Y. (2018). Relationship between innovation capability, innovation type, and firm performance. Journal of Innovation & Knowledge, 3(1), 44-55.
Rua, O., França, A., & Ortiz, R. F. (2018). Key drivers of SMEs export performance: the mediating effect of competitive advantage. Journal of Knowledge Management.
Schanz, K. U., & Sommerrock, F. (2016). Harnessing technology to narrow the insurance protection gap. Report/The Geneva Association: Zurich. Retrieved from https://www.genevaassociation.org/sites/default/files/research-topics-document-type/pdf_public/harnessing-technology-to-narrow-the-insurance-protection-gap.pdf
Shan, S., Luo, Y., Zhou, Y., & Wei, Y. (2019). Big data analysis adaptation and enterprises’ competitive advantages: the perspective of dynamic capability and resource-based theories. Technology Analysis & Strategic Management, 31(4), 406-420.
Slater, S. F., Mohr, J. J., & Sengupta, S. (2014). Radical product innovation capability: Literature review, synthesis, and illustrative research propositions. Journal of Product Innovation Management, 31(3), 552-566.
Stevenson, W. J. (2009). Operations management (10th ed,). McGraw-Hill Irwin Higher Education.
Vicente, M., Abrantes, J. L., & Teixeira, M. S. (2015). Measuring innovation capability in exporting firms: The INNOVSCALE. International Marketing Review, 32, 29-51.
Waseem, B., Loo-See, B., Adeel, A., & Riaz, A. (2018). Impact of intellectual capital on innovation capability and organizational performance: An empirical investigation. Serbian Journal of Management, 13(2), 365-379.
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic management journal, 5(2), 171-180.
Wu, X., Gu, Z., & Zhang, W. (2008). The construction of innovation networks and the development of technological capabilities of industrial clusters in China. International Journal of Innovation and Technology Management, 5(02), 179-199.
Wu, J., & Chen, X. (2011). Leaders social ties, knowledge acquisition capability and firm competitive advantage. Asia Pacific Journal of Management, 29(2), 331-350.
Zawislak, P. A., Fracasso, E. M., & Tello-Gamarra, J. (2018). Technological intensity and innovation capability in industrial firms. Innovation & Management Review, 15(2), 189-208.
Zhou, Y., Pan, M., & Urban, F. (2018). Comparing the international knowledge flow of China’s wind and solar photovoltaic (PV) industries: Patent analysis and implications for sustainable development. Sustainability, 10(6), 1883.
DOI: https://doi.org/10.22190/FUEO201211005A
Refbacks
- There are currently no refbacks.
© University of Niš, Serbia
Creative Commons License CC BY-NC-ND
ISSN 0354-4699 (Print)
ISSN 2406-050X (Online)