Microinsurance Expert for the Consulting Services for the “Review of Existing Product Lines & Insurance Distribution Network” in Bangladesh

Background:

Bangladesh faces a series of key institutional, technical, financial, and operational challenges in developing crop, livestock, micro insurance products and services that are suited to the needs of the country and in scaling-up the demand for and supply of these insurance products.

In Bangladesh, number of valued life insurance policies (paid-ups and in-force) currently stand at around 10 million, the proportion of paid-up policies in total; valued policies are very high. Very high lapse ratio, early surrenders and a very high proportion of paid ups have contributed to low density and penetration. Had the policy discontinuances been at the international level density and penetration would have been much higher than the present levels.

Bancassurance is not a feature of the market, as banks in Bangladesh are not allowed to act as insurance agents and are not involved actively in selling insurance although, because of their lending activities, they are unable to direct business to a favored insurance company.

As stated above related to bancassurance, Banks in Bangladesh are not allowed to act as insurance agents and are not involved actively in selling insurance. As many of their lending facilities require the security of a life insurance policy; however, they can be able to direct business to a favored insurance company. In such circumstances some unofficial form of recompense is likely to occur. An official commission cannot be paid as only individuals can hold insurance agency licenses; banks generate this business over the counter, in their branches.

As the COVID-19 crisis evolves, it will continue to affect insurance distribution around the world. Insurers can prepare by building a strategy focused on near- and long-term implications. To address these challenges, Bangladesh insurers will need to rethink their distribution model across three dimensions: customers, sales force, and enablers (such as investment in data and digital tools). Doing so will empower them to prepare for the unpredictable.

Project Activities/Tasks:

1. Prepare Inception report detailing how the consultant will perform the assignment, including workplan, staffing, and timeline for completion of the tasks and deliverables.
2. Review and prepare feasibility report for all existing insurance lines/products that currently available in Bangladesh insurance market. This work also should focus to review existing products of JBC and SBC and to develop new insurance products especially health insurance policy, education policy for JBC. This work should focus to develop new insurance product/s close the protection gap (such as climate related risk products, bancassurance and investment/unit linked insurance product).
3. Review Takaful, microinsurance and recommend pricing strategy based on such review.
4. Prepare Draft Takaful regulation taking account Takaful white paper coming directly under the BISDP.
5. Develop market conduct guidelines for effective product development that includes market needs analysis, technical pricing, effective distribution channels, clear policy wording, and fair claims handling.
6. Prepare a strategy paper on enhancing distribution strategy to reach untapped population in middle and low income in the short/medium/long term. – strategy paper including reporting process to capture information, determination of regulatory changes required, new guidelines and allowances. How to implement technology, successes elsewhere.
7. Prepare a white paper on developing an enabling agricultural, micro insurance (micro health, micro credit etc.) product and family takaful to tap the untapped lower- and middle-income people in Bangladesh. This report should consider institutional, technical, financial, operational and climate change challenges.
8. Prepare a report on online selling of insurance products and“Standardizing the Traceability & Identification involved in Internet Sales of Insurance Products'.
9. Prepare Manual/guidance on shifting to digital tools (how technology is transforming insurance distribution channels) and provide recommendations as to how regulations should be changed to encourage such development.
10. Prepare a report along with recommendations analyses and recommendations of the influence of distribution strategies on the efficiency of life and non-life insurance firms.
11. Prepare a Report on the role of distribution channels in market discipline (ICPs (Insurance Core Principles 18 and 19) for the life insurance industry.
12. Conduct local Trainings for JBC (50 officials), SBC 50 (officials), BIA (10 officials), IDRA & PIU (total 150 officials).