| dc.description.abstract | Reinsurance is a highly complex global business that is uniquely not limited by territorial
boundaries and can perhaps be described as a pivot on which the insurance industry swings.
Insurance cedes part of their risks to reinsurance for their own cover against potential
losses. Humongous risks are transferred to insurance but the effects hit at the instance of
losses. To absorb these effects, reinsurance contracts provide for modalities of
indemnifying insurers against claims the latter pay to the original insureds. The Kenya
insurance industry heavily relies on reinsurance for management of claims. Reinsurance
industry in Kenya is growing currently represented by seven companies which have
established offices in the country. There are other reinsurers who support Kenyan insurance
industry from outside the country. This notwithstanding, there has been a concern by the
body regulating insurance in Kenya that claims service level is contributing to the slow
uptake of insurance and therefore low penetration. There are impeding issues that constrain
seamless business relationship between the insurers and the reinsurers. The objective of
this study was to determine the nature and challenges of claims management by reinsurance
companies in Kenya. This study adopted the census survey method where a structured
questionnaire was administered to four reinsurance companies that carry out claims
function in the country. The study found that incorrect cessioning of claims and delayed
settlement of reinsurance premiums by cedants as the principal challenges curtailing the
speed with which reinsurers ought to carry out their claims management obligation. Late
notification of motor claims and demand of payment for claims which exceed agreed upon
limits were other challenges that need to be addressed. The study recommends legislation
of an association for reinsurers to provide a formal forum where issues of collective
concern can be addressed by all reinsurers. Further, training of staff in ceding companies
on reinsurance claims aspect was also suggested for advancement of knowledge necessary
to effectively manage claims. Drawbacks encountered while carrying out this study were
mentioned. This was the first research in the concept and context therefore the study
recommended areas for further study to identify other challenges which should be
addressed for enhancement of insurance penetration in Kenya. The study also highlighted
implications for policy and practice. These are the need to strength compliance platform to
policies designed by the government through the IRA for timely settlement of premiums
as well as notification of claims. Further, close working relationship between reinsurers
and reinsureds is necessary for satisfactory performance of claims management function in
order to raise the attitude and uptake of insurance by potential insureds. | en_US |
