Country: occupied Palestinian territory
Closing date: 21 Jan 2019
Developing the Agricultural Insurance System in Palestine Terms of Reference
1 INTRODUCTION
Agriculture is an integral component of the Palestinian economic, political, social and cultural infrastructure. In 2011, the agricultural sector accounted for 5.5 per cent of the Palestinian GDP and 11.5 per cent of total employment in Palestinian territories. Moreover, agriculture in Palestine has been an indispensable source of food during the hard times. Agriculture plays a key role in the country food security and people nutrition especially in the face of climate change. Palestine exports quite significant quantities of vegetables and olive oil and other agricultural commodities. The annual exports agricultural export reached $57,000,000, representing 6.3% of total country exports in 2013.However, the agricultural sector is affected by many risks which include unfavorable weather conditions and emergencies. Recently, the risks associated with the increasing climate change including storms, floods, frosts, droughts, and desertification, is considered the most dangerous risks besides the political risks represented by Israeli restrictions. Both types of risks have resulted in the erosion of the agriculture sector’s productive capacity. The restrictions have major implications, such as lack of access to the desired inputs, increased production costs, and low profitability. Moreover, the increasing effects of natural and political disasters causing unprecedented losses and damages that exceed the ability of farmers and Palestinian Authority alike. The Palestinian authority is currently facing some financial difficulties that make it not able always to cover all expenses of both types of damage - climate-related and political. The aggregate value of damages estimated by the Palestinian Agricultural disaster Risk reduction and Insurance Fund in 2014 and 2015 due to natural disasters amounted to NIS 88 million. In order to identify and address this problematic issue, the government needs to overcome the existing impediments and help farmers to fulfill their risk management activities with financial tools such as insurance. Therefore, Agricultural insurance is an effective mechanism for reducing the losses, which farmers incur due to natural calamities.
The Palestinian Agricultural Disaster Risk Reduction and Insurance Fund (PADRRIF) were established in 2013 by the Palestinian Government to address the problems of political and natural risks in order to help farmers managing their risks. PADRRIF is planning to manage agricultural risks through preparedness, risk mitigation, and recovery programs, by providing early disaster warnings, insurance services & aids. This will help farmers to improve their resilience in face of natural and political risks, as well as, to develop the agri-business investment environment, attract production and development projects, and accelerate agricultural development and economic growth. Some expertise like actuarial, which is necessary for product design and risk pricing, is often scarce in developing countries. Without actuarial product design and evaluation, it is not possible to ensure that insurance products are sustainable. There is a good range of skills and expertise that the PADRRIF staff has from their previous roles. However, none of the staff has had any insurance and actuarial experience. Therefore, PADRRIF is relatively new to agricultural insurance and is currently defining its role and activities. PADRRIF staff still requires a substantial skills capacity building in various components of agricultural insurance. This should include knowledge and skills in underwriting, product development, pricing, loss adjustment, insurance wording etc. PADRRIF’s management and employees need a reliable and focused capacity building program on a wide range of topics for the effective functioning of agricultural insurance and disaster risk reduction. The program should be based on the international know how and skills transfer.
2 BACKGROUND
Recently, the European Union, through EUREP, who recruited a group of Experts to assess the current environment in Palestine and design a roadmap for agricultural insurance systems development. On 14th of March 2018 the Experts issued a report that includes all the technical, policy, legal, financial, market and organizational requirements for establishing agricultural insurance in Palestine. The report reflected the analysis of the following sectors: agricultural and insurance industries in Palestine, role of PADRRIF, legal regulatory framework, public private partnership. The roadmap recommended six solution pillars, which include among others building the knowledge capacity of PADRRIF’s staff in all areas related to agricultural insurance. The roadmap also described the pilot implementation case of the agricultural insurance in Palestine. For the benefits of agricultural insurance development, the road map suggested a series of the stakeholders’ workshops, engagement of the international experts and different theoretical and practical training sessions for the local staff.
3 OVERALL OBJECTIVES
In order to protect farmers from weather calamities and improve agricultural productivity PADRRIF and Palestinian government intend to establish a sustainable system of agricultural insurance.
3.1 Objectives
Analysis of stakeholders’ framework through reporting on the functions of different Palestinian state institutions and other stakeholders, and their potential role in agricultural insurance, whether governmental or in the form of PPP;
Statistical data analysis through interviewing farmers, collecting and analyzing the data for farm risk definition and insurance rate calculation;
Insurance product design, through outlining the terms and price of insurance coverage;
Drafting agricultural insurance regulations by over viewing the legislative environment, and the existing legislative framework and the necessity of the additional law(s) and regulations;
Development of underwriting principles and insurance documentation by creating an insurance application, policy wording, principles and rules for estimation of the insured risks;
Development of loss adjustment principles through developing or transferring loss adjustment methodologies for the crops and risks that will be suggested by the insurance product; loss notification and estimation forms.
Development of PADRRIF staff capacity, through conducting a series of trainings on data, agricultural Insurance products documentation, loss adjustment.
4 EXPECTED OUTCOMES
Consolidation of the overall agricultural risk environment and outline of the agricultural insurance framework.
Define the agricultural insurance data and Advise on the database building.
Create four agriculture Insurance Products one of it livestock product including their pricing.
Outline of the necessary public-private partnership for agricultural insurance system.
Draft for the agricultural insurance regulations.
Organizational management structure including financial management technical procedures.
Institutional Capacity Building for PADRRIF, Palestinian insurers and other stakeholders: underwriting expertise, loss adjustment, regulation framework, IT and technologies, (on -job training .
5 REQUIRED EXPERTISE:
The team of consultant or consortium of consultants should include experts that have the following competences and proven experience:
Multiyear experience in formulation, operation and management of the agricultural insurance systems;
Demonstrated experience in understanding and development of regulatory frameworks in the field of agricultural insurance;
Proven capacity in conducting actuarial analysis and agricultural insurance product development in countries with a similar climate and crop composition;
Capacity to design and/or set-up loss adjustment processes, as well as training of agricultural loss adjusters;
Organizational management experience including financial management.
Proof of previous relevant experience in the sector.
Description of the background of your organization relevant to this task, including your organization’s knowledge, skills and experience with similar tasks. Please include concrete examples of past work related to this assignment.
5.1 Implementation team
As a minimum, the selected consultants should be qualified to fulfill the following roles during the longer term or shorter terms assignments:
5.1.1 One Senior Agricultural Insurance Consultant / Team Leader.
Requirements:
Minimum 8 years of experience in the insurance and reinsurance industry on the positions related to agriculture;
Demonstrated minimum of 4 years of experience in leading teams of experts in the area of agricultural insurance or similar assignments;
Minimum of 3 years of experience in the area of stakeholder communications, consensus building and Professional knowledge of English
5.1.2 One Senior Agricultural Insurance Consultant / Deputy Team Leader
Requirements:
Minimum 8 years of experience in the agricultural insurance industry
Proven 4-year track record of experience in re-insurance
Demonstrated 4 years of experience in the area of agriculture
Minimum 4 years of experience in the financial management of agricultural insurance
Professional knowledge of English. Knowledge of Arabic is an advantage
5.1.3 One Senior Actuary.
Requirements:
Minimum 5 years of actuarial analysis experience
Minimum 2 years of experience in working with agricultural insurance products
Professional knowledge of English
5.1.4 One Senior Legal Specialist.
Requirements:
Minimum 5 years of legal experience: working with laws, policy wordings
Experience in working with agricultural insurance issues
Professional knowledge of English and Arabic
5.1.5 One Senior Specialist on agricultural loss adjustment.
Requirements:
Minimum 5 years of experience on agricultural loss adjustment: theoretical and practical
Professional knowledge of English
5.1.6 One Junior Actuary
Requirements:
Knowledge of Insurance industry and its operations
Academic Knowledge of Actuary Science
6 Methodology and Timeframe
Phase
Phase Project phases
Outputs Estimated duration to complete
Required Experts
Target due dates
1
Inception Phase
1 month
All the team
End of February
2
Analysis of stakeholders’ framework: report on the functions of different Palestinian state institutions and other stakeholders, and their potential role in agricultural insurance PPP
2weeks
Team leader
End of February
3
Statistical data analysis and insurance product selection: interviewing farmers, collecting and analyzing the data for farm risk definition and insurance rate calculation
1 month
Senior actuary and Junior Actuary, in collaboration with team leader
10th March
4
Overview of legislative environment: report on the existing legislative framework and the necessity of the additional law(s) and regulations, drafting an agriculture insurance regulation.
1 month
Senior legal
10th March
5
Insurance product design and distribution channels: outlining the terms and price of insurance coverage and mapping for insurance products distribution channels
1 month
Team leader
30th April
6
Development of underwriting principles and insurance documentation based on the acceptable reinsurance worldwide rules: creating an insurance application, policy wording, principles and rules for estimation of the insured risks, opening communication channels with reinsurance companies, development of financial management of agricultural insurance scheme.
1 month after the product outline
Team leader, deputy team leader, loss adjustment specialist expert
30th May
7
Development of loss adjustment principles: developing and transferring loss adjustment methodologies for the Agricultural Products and risks that will be suggested by the insurance product; loss notification and estimation forms
3 months
Loss adjustment specialist in collaboration with local staff
30th August
8
PADRRIF staff training: series of trainings on data, product, insurance documentation, loss adjustment
3 weeks
Team leader, actuary, loss adjustment specialists
Various trainings after finalization of the key project stages
9
Monitoring of the product and system implementation
2 months
Team leader, loss adjustment specialist
31 October
7 REPORTING
The Team of Experts will report all findings and results to the Head of PADRRIF.
7.1 Counterparts
The international consultants are expected to collaborate with PADRRIF staff in order to transfer knowledge, build the operational capacity of and train operatives that will be part of The Project Implementation Team identified by PADRRIF management. This should be led by:
7.1.1 Project Implementation Manager
The project implementation team will be led by a Project Implementation Manager, with the following skills
· High management skills and experience.
· Excellent knowledge of English
· Excellent communication skills
· Good connection with Palestinian stakeholders
8 PROJECT STARTING DATE
The project is expected to start on February 3, 2019, and end on October 31, 2019
9 INCIDENTAL EXPENDITURES
Travel expenses for experts
Per Diem for experts in Palestine
Local transportation and telecommunication cost
– For visiting regions and farms.
- Interpreters accompanying the international experts work and trainings in Palestine.
10 Technical and Financial Proposals
TECHNICAL PROPOSAL
The Technical Proposal of the bidder should entail the following:
Profile of consulting firm and a list of similar assignments.
Suggested team composition and their CVs. Please provide a brief description of each team member and a statement of how team members complement each other to meet the knowledge and skills needs of the assignment
Description of the work methodology and approach.
Action plan and timeframe.
Three customer references for similar service for the last three years
FINANCIAL PROPOSAL
The Financial proposal of the bidder should be expressed in Euro and contain the following information:
Cost of Personnel for international experts including their on-field and home work as well as back-up services.
Allowances and accommodation for trips of international experts during their on-field work.
International travel cost: air fares, transfer, visas.
Cost for local transport: lease or rent of the vehicle for on-field missions, taxi cost.
Procurement of equipment: if necessary the cost of the specific office and work equipment (GPS, digital camera, drone).
Miscellaneous cost: additional services, translation, training facilities cost.
11 Deliverables
1- Agricultural insurance system compatible with farmers' needs in Palestine.
2- Four agriculture Insurance Products including their pricing as a pilot are done.
3- Information and data on the overall agricultural risk environment and on the demand for insurance services are collected, analyzed and used for a thorough assessment for the development of an agricultural insurance framework.
4- The technical capacity of PADRRIF staff is built and consolidated on agricultural insurance for the Palestinian Territories.
5- Loss adjusting guidelines completed.
6- Underwriting guidelines and procedures completed.
7- Organizational strategy and financial management modeling for the new insurance scheme.
How to apply:
Application
Applicants are required to submit following documents to procurement.jerusalem@oxfam.org by COB 21st of January 2019 with subject line Developing the Agricultural Insurance System in Palestine
