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THE INSURER RECOVER JOURNAL OF THE ASSOCIATION OF KENYA INSURERS VOLVOL 16 20 DECEMBER JUNE 2019 2017 IN STYLE WITH JUBILEE’S FREE HOSPITAL INPATIENT BEAUTY THERAPY... HAIR DO OR MAKE-UP OR MANIPEDI *AT ALL MAJOR HOSPITALS CALL US TODAY: 0719 222 111 www.jubileeinsurance.com THE INSURER | JUNE 2019 CONTENT EDITOR’S NOTE 03 MEDIATION; THE GENTLEMAN’S JUSTICE SYSTEM 04 BLOCKCHAIN TECHNOLOGY IN INSURANCE 06 RISK TRANSFERENCE 09 We would like to appreciate members for DIGITAL TRANSFORMATION 12 their support towards 9th edition of the FINANCIAL LITERACY IN PHASES 14 medical camp held on Saturday 8th June at GLOBAL TRENDS 16 HOW INSURANCE WORKS 18 Isinya, Kajiado County. HUDUMA NAMBA 20 CHECKING INSIDER THREATS 22 ABOUT MENTAL HEALTH 24 Special thanks to SANDBOX REGULATION 26 APA Insurance, Britam General Insurance, TREATING CUSTOMERS FAIRLY 28 CIC General Insurance Co., INSURANCE AGAINST TERRORISM 30 Fidelity Shield Insurance Co., BEATING ALL ODDS 32 Heritage Insurance Co., ICEA Lion Group, OF SMES AND INSURANCE 34 Intra Africa Assurance Co., Liberty Insurance, Madison Insurance Co., Occidental Insurance Co. and UAP-Old Mutual Group. I NSECURITY S U R A N C E & 1 THE INSURER JUNE 2019 THE INSURER | JUNE 2019 THE INSURER | JUNE 2019 Over the Easter weekend this year, one of our banks lost over Ksh.10 million through sophisticated ATM attacks: The four ‘hit ‘machines were not vandalised, rather they were ‘manipulated’ through state-of-the-art cyber commands to empty their cassettes into the perpetrators’ gunny bags. This malpractice—known as ATM Jackpotting—is a recent phenomenal Dedicated to Excellence having emerged in the US less than two years ago and is as sophisticated as they come: It is time our security organs ‘upped’ their game and ‘hit’ back in equal intensity. The ZEP-RE Academy, the frst of its kind on the African continent, was established to institutionalize Violent robberies are a thing of the past, thanks to advances nay innovations ZEP-RE’s founding mandate of training insurance and in technology. As Moses Wetsusa discerns in Risk Transference, businesses reinsurance industry personnel in the sub-region. of all sizes are struggling to identify, assess and respond to an explosion of digital threats and targeted cyber-attacks that could paralyse their operations at any moment. Consequently, any forward-looking company EDITOR’S has to rethink its security wellbeing. And on this front, insurance companies are the most vulnerable as they transact large amounts of money on their NOTE day-to-day operations in claims and premiums. One of the biggest risks to any commercial entity is its most treasured asset; staf. Gone rogue, members of staf can in a fash bring an employer to his knees: An insider is more dangerous that an ‘alien’ to a business. Insider threats are not pedestrian but they emanate from the way a company treats its staf that in return may impact their social lives leading to the drive to EDITORIAL TEAM ‘rebel’. The buck in this scenario stops—as we learn from Checking Insider Threats—with security/HR minders as people generally do not get a job to Tom Gichuhi- become an insider: It is a result of something happening. In similar breath, Executive Director, AKI Jacob Ochola notes that insurance against terrorism is vital in ensuring our individual and general security since a standard terrorism and sabotage Vivian Ochieng- CIC Group policy ofers insurance for life and assets that are exposed to war, terrorism and political violence attacks. Naomie Kemei Pioneer General Insurance Disputes date back to the onset of human civilisation; what matters is how they are resolved. Legal suites always leave a bitter after-taste hence the Jane Ngugi Madison Insurance need for more amicable resolutions. Mediation comes in handy here as it is—as Shafq Taibjee maintains—the gentleman’s justice system. Mediation Paul Sagati is one the frst steps a business takes not only to deal with internal work ICEALion place disputes between staf and internal customers as they are known but external customers as well Hazel Kingóri AKI Know-your-customer is a vital component of any business transaction. William Kiama At times, scanty customer data impedes business growth and innovation, AKI this could be solved by the recently launched Huduma Namba. As Morris Aron avers, data guides strategy and operations. Huduma Namba database Naomi Ngugi provides a vital source of data that if used by those in the fnance and AKI insurance sectors will lead to better ways of making sales, serving customers better, innovating products and so on. Aram Kaboro Consulting Editor Most of the illnesses taking people to the hospital today are triggered by a mental health issue: Depression is all over, especially among the youth; so Courses offered: observes Grace Kariuki-Nderitu. If medical cover for depression was easily accessible and symptoms of mental health conditions were widely known, ∙ Profciency in Short Term Reinsurance Practice ∙ Life Assurance Practice & Claims Management ∙ Travel, Cyber Crime, PVT & Agricultural some of these cases would have been averted: What say you industry? & Claims Management (PSTRP) ∙ Enterprise Risk Management & Risk Based Insurance Underwriting ∙ Fire & Engineering Underwriting & Claims Capital ∙ Bonds & Guarantees Underwriting Management ∙ Risk Survey Workshop ∙ Yellow Card Motor Claims Management. DISCLAIMER Editorial opinion or views expressed in this journal are not necessarily those of the Association of Kenya Insurers (AKI) and AKI accepts no responsibility for any statement contributors may express in this publication. Articles are considered for publication on the basis that they are the author’s original work. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior written permission of AKI. HEAD OFFICE KENYA • ZEP-RE Place, 8th Floor, Longonot Road, Upper Hill 2 P.O. Box 42769-00100, Nairobi, Kenya • Tel: +254 20 4973000/ +254 709 973000 THE INSURER JUNE 2019 Email: [email protected] • Website: www.zep-re.com !"##$%%&'(%"()*+,$%-(.&/0$1& THE INSURER | JUNE 2019 THE INSURER | JUNE 2019 the court. This is a process which is in control of the parties employment practices liability. Mediation of third-party claims MEDIATION; unlike arbitration or a court trial. In this process, there is is advantageous for several reasons. First, it allows claimants, no judge who decides the outcome. There are a myriad of often times aggrieved individuals, to air their grievances in a cases in today’s business environment that mediation is a controlled, civil and courteous environment. This is particularly The gentleman’s justice system preferred method. For example, in family matters, art related constructive in the employment practices setting. Furthermore, it disputes, disputes between states, insurance matters and so allows the claimant to speak to the mediator privately to develop The whole process depends on whether the parties are willing to fnd common ground on. Mediation is usually conducted in shuttle diplomacy creative non-monetary solutions, for example, relocating the and allows parties to be heard in separate meetings called disgruntled employee to a diferent department. and to subsequently enforce the agreement reached caucuses. The Insurance (Third Parties Risks) (Amendment) Act 2014 Section 4 (1) (b) specifcally mentions arbitration or Second, in the case of multiple defendants with indemnifcation By Shafq Taibjee mediation. and subrogation claims, a unique opportunity is aforded for the In Kenya’s Alternative Dispute Resolution (ADR) most defendants to collectively work together in order to resolve the popular forms are Arbitration, Mediation and Adjudication. Any business—insurance included—works on how well the matter with the help of a skilled mediator rather than as fnger For the purpose of understanding the diference we will customer is treated and whether they would be willing to deal pointing adversaries. touch on arbitration and adjudication superfcially. with you as repeat customers. On daily basis, we read about various complaints against businesses where claims have Third, and perhaps most obvious, is mediation allows both Arbitration is the submission of a disputed matter to an impartial been delayed or not paid, deals that did not end well due to sides to avoid the cost of litigation and risk of trial. Mediating third party for decision making. The third party is known as the individuals involved in the transaction and so on. Mediation at an early stage is advantageous to both parties in that it avoids arbitrator and his decision is known as an award. It is an is one the frst steps a business takes not only to deal with the “sunk cost” phenomenon where litigants feel obligated to out-of-court method for resolving a dispute. internal work place disputes between staf and internal “stay the course” of litigation because their clients have already I customers as they are known but external customers as well. invested so much time, efort and money into the litigation. Adjudication is a procedure under which an independent third party called an adjudicator—within a fxed period (28 days) and in Workplace confict is managed by professionals who the accordance with agreed procedures—will give an interim decision on company can outsource as consultants and it makes a huge Cases involving third party claims are among the most frequently a dispute, which must be implemented. If either party is not satisfed diference in the smooth operations of the workplace. This seen by the commercial litigator. A typical insurance liability with the decision, then the dispute can be referred to a fnal procedure is an area that must be dealt with on its own and would be a agreement imposes a duty on the insurer to defend and indemnify such as arbitration or litigation.

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