The research was on a comparative study of pre and post-merger factors on financial performance of insurance companies in Kenya; a case study of ICEA insurance firm. The research objectives which guided this study were; to establish whether competitive advantage affects financial performance of insurance companies in Kenya, to establish whether operational efficiency affects financial performance of insurance firms in Kenya and to establish whether tax reliefs affect the financial performance of insurance firms in Kenya. This study was based on the synergy theory and efficiency theory.Synergy theory suggests that mergers and acquisitions occur widely because mergers are able to benefit the acquiring and target firms with synergies that enhance firm value in the longer term (Hitt et al., 2001) while efficiency theory which suggested that mergers can only occur when they are anticipated to generate enough realizable energy to make the agreement which is beneficial to both parties.Both quantitative and qualitative approaches were adopted in this study. The sample size populationof this study was 50 respondents comprising of29finance officers, 7 top management and 14 external auditors from four selected ICEA insurance firms. Data collection instrument that was used in this study was questionnaire for respondents.Questionnaire consisted of closed and open-ended questions. Respondents were selected using stratified random sampling technique.Quantitative data was analyzed using descriptive analysis by using the Statistical Package for Social Scientist computer software. While qualitative data was analyzed using content analysis where responses were discussed based on the research questions of the study. The findings were discussed thematically as per the study research questions. The findings of this study were that competitive advantage affects financial performance of ICEA insurance firm in Kenya in that after merger the business expands, profitability increased, merger strategy put the ICEA insurance firm on a globalized scale and quality of service is created. The merger of the firmsalso creates more efficiency and monopolies hence an effect on competitive advantage and employees were given top priority during the merger. Operational efficiency after merger, ICEAfirms had enjoyed economies of scale efficiencies to reduce production costs, increase output, improve product quality, obtain new technologies and introduce new products hence improving financial performance of the ICEA insurance firm.About effects of tax reliefs on the financial performance ofICEA insurance firms, after merger ICEA insurance firmsenjoy the tax liability because of debt in tax deductible expenses. This helps increase profits as well as value of shares of the ICEA insurance firm. Tax loss carry-forwards also motivate mergers in that insurance firm. Tax advantages also arise in a merger when a target firm carries assets on its books with basis, for tax purposes, below their market value. The study recommended that more insurance firms in Kenya and beyond should seek to attain positive competitive advantage through consolidating their firms through the merger strategy. The study further recommends that for effective mergerfirm should have similar approach to rewards and promotions of its employees.