বীমা উন্নয়ন ও নিয়ন্ত্রণ কর্তৃপক্ষ



Insurance Development and Regulatory Authority Bangladesh Insurance Sector Development Project (BISDP) TERMS OF REFERENCE FOR Life Insurance Actuary Individual Consultant Package No-S10-3-1Background:Life premium per capita in Bangladesh is very low, which is to be expected in a country with a large and fast-growing population, the majority of which is poor, rural and outside the formal economy. There appears to be a belief in some quarters that having ever more insurers will encourage the sale of more policies to a wider customer base. Most market sources, however, feel that, unless ways can be found to provide low-level cover cost-effectively to those with little disposable income and to reduce the high surrender ratio, there are too many insurers competing for the same limited pool of premium.As the only two state-owned insurance organisations, Jiban Bima Corporation (JBC) and Shadharan Bima Corporation (SBC) offer life and non-life products respectively. SBC also offers reinsurance to all private non-life companies in Bangladesh. JBC also used to offer reinsurance under its Retrocession Agreement to most of the private life insurance companies in Bangladesh from the year 1985 to 2009 which JBC is not performing for the last few years due to lack of reinsurance administration. But recently JBC has taken steps to develop its reinsurance administration to carry on its reinsurance business with the private life insurance companies in Bangladesh. However, JBC operates much below its capacity despite their extensive branch networks. This is primarily due to lack of technical capacity of management as well as staff, limited use of information technology and inefficient business practices. Exemption from certain regulatory requirements also contributes further to inefficiencies as well as governance issues. JBC doesn’t only need to comply with management fit and proper requirements but have been subject until a recent change in their Act, to lower capital requirement than the rest of the industry. The minimum paid-up capital required to establish a new life and non-life insurance is BDT 300 million (US$3.8 million) and BDT 400 million (US$5.1 million) respectively as per the current Insurance Act. However, for JBC and SBC, the minimum paid up capital has remained BDT 50 million (US$637,100) and BDT 200 million (US$ 2.6 million) respectively as per the Insurance Corporation Act, 1973 but is being raised to match the requirements of private companies. While being the fifth largest life insurance companies in the country, JBC has an extensive semi-urban and rural footprint through large network of branches. This contrasts with the most other private insurance companies which are located in urban areas and have typically only a few branches in rural areas, leaving the large majority of the population out of their reach. While JBC is well positioned to address the market failure resulting from private companies focusing on urban areas, they are, however, currently operating significantly below their potential. JBC had a premium income of US$62.1 million in 2018 with an annual growth rate of 10.11 percent, which was significantly smaller than the growth rate of, for example, the market leader MetLife at 14.23 percent. In 2016 JBC's premium income amounted to 5.47% of the market total, occupying seventh position in the rankings. Unlike SBC, the state-owned insurer in the non-life sector, JBC does not have a monopoly of government and public sector insurance, and is not required to arrange reinsurance for the other life offices. JBC operates like any other life insurer in the market. With proper reforms, JBC has a potential to help increase life insurance penetration and coverage among the underserved in Bangladesh. More specifically, the state ownership function can be significantly enhanced, JBC board can be more empowered and professionalized to exercise the oversight and leadership functions as per best practice, an audit committee is recommended as a minimum to provide oversight, and the internal control functions need to be further strengthened.Objective:As managers of risk, life insurers have a compelling value proposition to help consumers reduce exposure to uninsured risks. Risk protection is the core of life insurance, and life insurers are well positioned to help societies reduce the mortality protection gap by doing more to reach out to consumers. To do so successfully, however, better understanding of consumer behavior and preferences is a pre-requisite. Therefore, an assessment report of consumer behavior should be prepared.In addition to the consumer report, the resident advisor’s task would be to provide technical assistance and set up strategy to the JBC senior management and technical personnel on understanding consumer behavior, acquiring and retaining customer , product knowledge and design, communication channels, risk mitigation, life insurance underwriting, claim management and reinsurance processes and other aspects of life insurance.Activities:The selected individual will be responsible for the following activities:Launch JBC Actuarial Valuation report for 2015/2016Prepare an assessment report on consumer behavior and targeting the following question: “Why consumers do not interested to buy life insurance in Bangladesh?” that includes pricing, affordability and value for money.Design a strategy for acquiring and retaining customerDevelop a guidance for new and tailored life insurance products including savings productsDevelop a strategy for more diversified portfolio not only JBC but also entire life insurance sector in BangladeshImprove JBC’s product knowledge, design and sales processReview and upgrade claims managementClose JBC’s own knowledge gap particularly in marketing in order to reach those who currently do not buy or do not consider buying JBC life insurance productsImprove communication with existing staff and educate technical personnel and distribution network including bancassuranceLiaising with IDRA to keep updated on the government regulationsStrengthen management skills and educate technical staff on assessing their risk mitigation needsProvide guidance on life underwriting, claim management and reinsurance processesSubmit reports on completed work on agreed schedule and frequencyQualifications and Experience:Master’s in Statistics, Mathematics, Finance, Accounting, Management, Marketing , Business Administration and any other relevant subjectTraining on Actuarial science/ diploma in related area is must 10 years of work experience as a life actuary in the insurance sector with concentration on life insurance practices and new life insurance productsProven experience in conducting market assessments and writing consumer reports on all aspects of life insuranceExperience in designing life insurance products, claims management and distribution channels Strong management and communication skillsTechnical qualifications and expertise in life underwriting and reinsurance processes as well as risk mitigation techniquesPrevious experience in working in developing and emerging countries as well as with international development institutions is a plusExpected Outputs:Finalize consumer report on why consumers do not buy life insurance in Bangladesh. Based on the results of the report, fully developed strategy for JBC on understanding consumer behavior, product knowledge and design, technical aspects of marketing, communication channels, risk mitigation, life insurance underwriting, claim and reinsurance processes and other aspects of life insurance.Duration of the assignment: 42 months ................
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