For the last 2 months, we have been taking our daughter, now 4 months old, to the baby swimming twice a week. She enjoys it however she doesn't really swim. She just sits, floats and lounges: allowing the currents to take her up and down the pool. Is there anything we can do to encourage her to kick more when swimming.
Your daughter will be looking to you to provide cues, so the more you seem to be enjoying it and encouraging her, the more likely she will be to have fun, and having fun is the only way at that age that you're likely to get much in the way of results.
As Morah mentioned, the most important thing for her right now is enjoying her time in the water. This will set the stage for a better transition to swimming, as floating in a big pool of water won't be fundamentally a scary, strange thing.
However, there are things you can do to encourage your daughter.
First and foremost, be supportive. I mean both literally and figuratively. If your daughter feels like she might sink, she'll lose focus on enjoying being in the water.
Float her on her back, with your arm under her body, and your hand cradling her head. Gently turn in place, moving her through the water at a relatively slow pace, head first. As you do this, keep eye contact with her, smile(!), and be verbally encouraging. When we did this with my son, we were constantly saying "Wheee!!!" and "Kick! Kick! Kick!" to get him excited. The more he kicked, the more enthusiastic our cheering became (along with quite a few "Yay!"'s added in).
Our instructor also had us try a few other techniques, including blowing bubbles in the water, and quickly submerging the baby. However, these were classes for children 6 months of age or older, so 4 months is probably too young, and I would absolutely make sure that you have an experienced (and certified!) instructor on hand to help walk you through the proper techniques.