Reinsurance Claims Management 101: All You Must Know [2025]

Reinsurance claims are high-stakes and time-sensitive. A single oversight can delay payments, spark disputes, or tie up millions in capital. Teams often juggle thousands of documents, multiple stakeholders, and constantly changing loss estimates.

During catastrophic events, the pressure intensifies. Claims surge in volume, approvals become bottlenecked, and tracking every update manually becomes nearly impossible. Mismanaged processes not only slow recoveries but also erode trust between insurers and reinsurers.

These challenges reveal a simple truth: traditional methods are no longer enough. This blog provides a quick overview of reinsurance, covering its importance, future trends, and how claim teams can modernize the reinsurance claims management process using modern process automation tools like FlowForma. Let's dig in!

What is Reinsurance?

What is reinsurance?

Reinsurance is insurance for insurance companies. An insurance company (the ‘ceding company’) sells policies to individuals or businesses. To protect itself from very large or unexpected losses (for example, from natural disasters, pandemics, or unusually high claims), the insurer transfers part of its risk to another company—the reinsurer. In exchange, the insurer pays the reinsurer a portion of the premiums it collects. 

For example, if an insurance company insures a city’s stadium for $1 billion, it won’t want to carry all that risk. It may keep $100 million on its own books and reinsure the other $900 million with one or more reinsurers.

How Does Reinsurance Relate to Claims Management?

Reinsurance and claims management are closely connected. The way a primary insurer handles claims directly impacts what can be recovered from reinsurers. When a policyholder files a claim, the insurer pays it first, but if the loss exceeds the insurer’s retention limit, the reinsurer picks up the rest. 

How reinsurance and claims management work collaboratively

For example, if a factory fire causes $50 million in damage, the insurer may retain $10 million while the reinsurer covers the remaining $40 million. To make this process work, insurers need clear and accurate claims practices. Reinsurers depend on detailed documentation and timely reporting before they release funds. Effective claims management also speeds up recoveries, helping insurers maintain healthy cash flow and continue serving their policyholders.

Reinsurers often review or audit large claims to check they’ve been handled fairly and in line with contract terms. If claims are poorly managed, it can delay payments, spark disputes, or even lead to denied coverage. 

This relationship is especially important during major natural disasters. Events like hurricanes, earthquakes, or pandemics can trigger thousands of claims at once. In these situations, reinsurance is vital for funding payouts, and claims teams must work closely with reinsurers to track total losses and trigger catastrophe coverage.

Claims management software addresses these challenges by centralizing workflows, automating routine tasks, and providing real-time visibility. It ensures accurate reporting, faster recoveries, and transparent audit trails, giving insurers and reinsurers confidence that claims are handled efficiently and in compliance with all contractual obligations. Business process automation tools like FlowForma offer a suite of AI-powered innovations to help create claims management processes from scratch. 

Watch this short demo to see how claims teams and organizations can quickly create a claims management process with simple, contextual prompts. 

Demo explaining how to create a claims management process using FlowForma

Key Stages and Processes in Reinsurance Claims Management

Key stages of the reinsurance claims management process

The process generally involves the following key stages:

1. Claim notification

The process starts with a claim notification. When an insurer receives a large claim, the reinsurer must be informed quickly. This early notice usually includes the date of loss, policy details, and the initial estimate of exposure. Prompt notification ensures reinsurers are aware of potential liabilities from the outset.

With FlowForma, claim details can be captured through digital forms and automatically routed to the right internal teams or brokers. Notifications can be triggered instantly, ensuring reinsurers are updated in real time without relying on manual emails or phone calls.

Caption: FlowForma’s form automation feature
Alt-text: Image highlighting FlowForma’s form automation feature

2. Claim assessment by the insurer

Once logged, the insurer investigates the claim in depth. They confirm whether coverage applies, establish liability, and estimate the potential loss. Reserves are also set aside to fund the claim, and checks are performed to make sure the claim is legitimate and policy conditions are met.

FlowForma allows insurers to set up automated workflows where assessments are automatically assigned to the right specialists. Built-in rules validate the claim against policy conditions, while supporting documents are stored securely in one place. This creates a clear audit trail that reinsurers can trust. 

Here's a demo explaining how users can create an insurance claims process using FlowForma:

Recommended reading: A complete guide to enterprise workflow automation 

3. Reinsurance coverage determination

Not every claim is eligible for reinsurance—this stage is about checking the fine print. The insurer must review the reinsurance contract carefully to confirm that the loss exceeds their retention, falls within the reinsured layer, and isn’t excluded by any clauses. It’s a technical but essential step that protects reinsurers from paying for losses they didn’t agree to cover.

4. Claim reporting to the reinsurer

Once it’s clear the reinsurer is on the hook, the insurer must provide a formal report. This is more detailed than the initial notification and often includes investigation findings, supporting evidence, and estimates of the financial impact. Reporting may be direct or through a broker, depending on the reinsurance agreement.

Because these reports are lengthy and repetitive, automation is helpful. With FlowForma, for example, insurers can generate claim summaries using AI, compile supporting files, and route them through internal approvals before they are sent out.

This not only speeds up reporting but also ensures accuracy and consistency, two things reinsurers value highly.

5. Claims monitoring and updates

Some claims, particularly those involving litigation or natural disasters, evolve over months or even years. Loss estimates may rise, court cases may change the outcome, or settlements may shift the numbers. Insurers need to keep reinsurers updated at every significant development so they can adjust their exposure and prepare financially.

Dashboards and alerts make this process smoother. FlowForma provides real-time visibility into the status of claims. Instead of waiting for ad hoc updates, stakeholders can track developments as they happen, with automated notifications keeping everyone aligned.

FlowForma provides real-time dashboards and automated notifications, so updates are logged and shared with all stakeholders as they happen. This makes monitoring continuous rather than reactive and ensures reinsurers always have the latest information.

6. Reinsurer’s review and response to claims data

At this stage, reinsurers review the submitted information and confirm whether they agree with the insurer’s handling of the claim. They may request additional documents, expert opinions, or clarifications before acknowledging their share of liability. This step protects reinsurers while also keeping the insurer accountable for their claims practices.

Engage seamlessly with external shareholders via FlowForma

This back-and-forth can be time-consuming if it’s spread across multiple email threads. To avoid confusion, some insurers use workflow automation platforms that capture every query and response in one place. In FlowForma, for example, this creates a transparent log of communications, reducing the risk of disputes or misunderstandings.

7.  Payment and settlement

 FlowForma’s all-in-one process automation platform allows you to do everything in a centralized location

Once the reinsurer agrees to their share, it’s time for payment. Insurers issue reimbursement requests, sometimes known as cash calls. In many cases, reinsurers provide interim payments if the claim is still developing, with the final settlement made once everything is resolved.

FlowForma keeps all communications tied to the claim in one workflow. Queries, responses, and supporting files are tracked transparently, avoiding confusion from scattered email trails and creating a clear record of every decision made.

8. Post-claim analysis

The process doesn’t end when the money changes hands. After settlement, both insurer and reinsurer review the claim to identify lessons learned. Reinsurers may conduct audits to ensure compliance with contract terms, while insurers may refine complex claims processes, adjust underwriting practices for the future or optimize for renewals. 

The Future of Reinsurance Claims Management

The reinsurance claims landscape is undergoing a fundamental shift. Global insured losses from natural catastrophes reached $137 billion in 2024 and are projected to rise to $145 billion in 2025. Alternative capital is also reshaping the market, with $115 billion now flowing through insurance-linked securities, representing almost one-fifth of total reinsurance capacity. Despite these changes, inefficiencies persist. Forty percent of reinsurers still manage claims on spreadsheets, and industry-wide claims leakage averages 11 percent. According to PwC, expert claims systems or learning machines will be available for all claim types, including ongoing disability claims, by 2027.

Smarter AI for smarter claims management

Claims leakage averages 11% across the reinsurance industry, with ranges from 2.5% to 18% between best and worst performers. In such a scenario, artificial intelligence is changing how reinsurers process claims. Automated intake systems can now process cedent emails, PDFs, and spreadsheets within seconds. 

Document recognition tools classify files and extract key historical claims data fields, while validation engines check submissions against treaty terms and trigger workflows when thresholds are crossed.

The compliance and risk horizon for complex claims

Regulation is shifting at the same pace as risk. Contestability periods are narrowing, disclosure requirements are changing, and proxy data sources such as wearables are becoming more critical. 

While these tools can speed up decision-making, they also create new fraud risks, including data manipulation and exploitation of rules engines. Compliance automation and stronger fraud detection will be essential to safeguard future operations.

How does the future look?

Reinsurers can prepare for the future by investing in AI-driven claims automation platforms to reduce leakage, retraining global teams for analytics and fraudulent claims detection, and exploring partnerships with parametric and alternative capital providers. Automating compliance processes will also be critical as regulatory demands increase.

The next decade will redefine reinsurance claims management. Rising catastrophe losses, growing alternative capital, and advances in automation are forcing change. Reinsurers that modernize claims systems, adapt their workforce, and evolve their business models will be best placed to deliver faster, more accurate settlements and build resilience in a more complex market.

Tools like FlowForma are already leading this shift. By combining no-code automation with AI-driven workflows, FlowForma enables insurers and reinsurers to have the speed, transparency, and control needed to keep pace with rising claims complexity. The impact is proven—organizations across industries are realizing measurable efficiency gains and rapid ROI. To see how leading organizations are leveraging FlowForma and yielding ROI in under 6 weeks, download this book of success stories. 

Your Next Step To Modernizing the Reinsurance Claims Management Process

Discover how leading insurance organizations are pushing boundaries, going beyond expectations, and transforming their processes through digital innovation in this video.

Reinsurance claims management is a balancing act: insurers need fast recoveries to protect liquidity, while reinsurers demand precision, transparency, and proof at every step. Between them lies a maze of notifications, coverage checks, and negotiations that can stretch on for months. 

In the aftermath of a catastrophe like a wildfire, dozens of insurers may push claims into treaties while loss estimates shift daily. Every update must be logged, every step documented, and every decision may later face scrutiny where even a slight misstep can delay recoveries and erode trust.

This is where digital workflow software steps in. Instead of scattered spreadsheets, claims move through one structured system. FlowForma takes it further with AI-powered automation: instant notifications, automatic audit trails, and real-time dashboards giving everyone the same version of the truth. 

Here’s how FlowForma further simplifies the reinsurance claims management process:

• Faster claims digitization with AI Copilot that builds workflows in minutes from existing forms, diagrams, or even natural, simple prompts
• Even analyzes meeting conversations via Process Discovery Agent
• Greater accuracy in claim validation through AI agents that extract, classify, and check data against treaty terms automatically
• Faster process changes enabled by a no-code platform that lets business users (not IT) adapt workflows as treaty terms or regulations evolve
• Seamless collaboration across cedents, brokers, and reinsurers with external forms, Teams integration, and secure SharePoint-based storage
• Stronger compliance through eSignatures, full audit trails, and regulator-ready documentation that captures every claim action
• Error-free documentation with automated document generation
• Clearer insights for decision-making through real-time dashboards, trend analysis, and process performance monitoring
• Greater resilience and responsiveness during catastrophes with mobile-first claims intake, offline access, and remote approvals
• Cost-effective and faster ROI with 10x quicker implementation

When reinsurers audit a claim, they see a clear, step-by-step record of how it was assessed and whether it was settled promptly, not a pile of PDFs and emails. Such transparency builds trust, reduces disputes, and ensures that even in large-scale events, the process holds firm. 

The question is no longer whether reinsurance claims can be modernized. It’s how soon you want to get there. Ready to get ahead? Book a demo with FlowForma today.