Request for Proposals – Insurance Expert (Solomon Islands National Provident Fund)

The Solomon Islands shares similar climate and disaster characteristics with its Pacific neighbors who are prone to natural disasters such as flooding, earthquakes, cyclones and tsunamis. The availability of appropriate and affordable insurance cover in these situations can play an important part in helping people and businesses to increase their levels of resilience and safeguard life and property. However, according to the Pacific Financial Inclusion Programme’s 2015 Demand Side Study, Solomon Islands only has a 7% level of insurance penetration of the adult population, and this is lower than its main Pacific counterparts in the region. The Pacific Financial Inclusion Programme is part of the United Nations Capital development Fund (UNCDF).

Through the country’s National Financial Inclusion Strategy 2016-2020, the Central Bank of the Solomon Islands (CBSI) plans to increase insurance penetration to at least 20%, via the introduction of new products such as microinsurance and by potentially issuing insurance licenses to new service providers. In response to this, the SINPF is looking at participating directly in the insurance market or via a partnership agreement or distribution agreement with an existing insurance company to provide insurance products and schemes to its members.

The SINPF was established by the Solomon Islands Government under the National Provident Fund Act 1973 commencing its operations on the 1st October 1976 as a mandatory superannuation saving scheme, focusing primarily on employees in the formal employment sector. Recently the SINPF has set up a scheme that allows people in the informal employment sector to make contributions to the SINFP. The SINPF is headquartered in Honiara and has two branches – one in Auki, Malaita province and the other in Gizo, Western Province

Being the custodian of members funds, the SINPF’s primary role is to manage, grow and invest member funds in the financial markets to meet retirement liabilities of its over 130,000 members (60,000 of whom are actively remitting monthly savings). In 2017, the PFIP supported SINPF in developing a voluntary savings scheme for the informal sector, known as “youSave”. From the pilot test success, youSave was integrated into g the SINPF’s standard offerings, and is now being scaled at national levels to reach all nine provinces of the Solomon Islands

Insurance Concepts: A December 2017 actuarial report recommended that SINPF considers transferring its mortality and incapacity risk to an insurance company.  Further, during the Parliament’s Bills and Legislation Committee sessions in November 2018 relating to the SINPF Act (amendment), it was recommended that the SINPF Board conducts a study for the possibility of establishing an insurance company, either on its own or in partnership with others, to provide insurance cover for health, life and other insurance products to its members and the general public.

PFIP has been engaged by the CBSI to provide support in addressing this requirement. This TOR is designed to solicit for the services of an experienced and knowledgeable insurance expert to assess the options and mechanisms for the SINPF to provide insurance. This stage of the work will be limited to the provision of insurance to existing SINPF members and future members. The concept of looking at SINPF as a licenced insurance provider, supplying a range of insurances to the wider public, falls outside of this TOR, and will be considered at a later stage.

 

Scope of Work

The following are the deliverables under this assignment;

  1. Institutional and market assessment. Conduct an institutional and market assessment of SINPF and of the insurance sector players on the potential of SINPF to provide insurance cover and products to its members and the general community of Solomon Islands. Through this institutional assessment, and market assessment, the expert will consider the follow hypothesis with backed up with justifications;
  1. That SINPF is in position of setting up of its own Independent insurance company and sustainably manage its operations (to be accompanied with a proposed organization/management structure)
  1. That SINPF should consider partnership (for example shareholding) with an established insurance company legally operating in the Solomon Islands or within the pacific region (to be accompanied with leads and initial discussions to be picked up by SINPF senior management)
  1. That SINPF should consider working with an existing insurance company to provide insurance cover and products to its members.
  1. Through market engagement with existing members, SINPF staff and key stakeholders, conduct an insurance types and products assessment with recommendation to SINPF for appropriate insurance type and product mix offerings to provide to its members and potential wider community of Solomon Islands. This must be accompanied with a product development, evolution plan and operational mechanisms. 
  1. For sustainability purposes, develop business cases for insurance provision based on each of the hypothesis scenarios provided in scope 1 (above)
  1. Based on the selected hypothesis, support the SINPF in designing an implementation plan of providing insurance cover and products to its members and possible wider community.

 

Full RFP can be found here

Applications close 12 April