Challenges of globalization faced by the Kenya Reinsurance Corporation
The Reinsurance industry in Kenya has in recent years experienced significant turbulence as a result of environmental change. Organizations depend on the environment for their survival and therefore it is necessary for them to scan the environment in an effort to identify changing trends and conditions that could eventually affect the industry and adapt to them (Thompson and Strickland, 2003). This study was a case study conducted to identify the challenges faced by the Kenya Reinsurance Corporation as a result of globalization, and the response strategies it has employed against these challenges. The study used secondary data collected from existing company records and reports of the Insurance industry. It also used primary data that was collected by administering an interview guide to senior management of Kenya Re. The study identified the challenges of globalization as intense competition, cultural diversity, technological challenges, legal and regulatory challenges, currency fluctuations, insecurity, inefficiency and bureacracy. Kenya Re has responded to these challenges through aggressive marketing, market expansion, strategic alliances, product research and development, restructuring, outsourcing of non-core functions, competitive recruitment and remuneration, objective performance management and upgrading its information technology system. The study recommends that Kenya Re develops a distinctive competitve advantage to enable it gain a competitive position against its competitors, and that it employs effective cost control methods. The study also recommends that Kenya Re continuously reviews its governance performance, sets performance targets and adopts performance management systems to ensure it does not develop complacency as a result of guaranteed business in Kenya through the legal mandatory cessions.