Philippines: Structuring a Public-Private Earthquake Insurance Pool in the Philippines

Finance - Insurance and contractual savings

The implementation of the PPTA will require the services of a multidisciplinary team comprising international and national consultants (in the form of a firm or as individuals). Twelve (12) consultants (6 international and 6 national) will be recruited through an international firm and as individuals in accordance with the ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). An international firm will be engaged on a QCBS basis to undertake the demand analysis of the new insurance product, lead the domestic consultants and coordinate with the individual international experts on overall project delivery. Individual international financial specialists will be hired on a lump-sum basis to undertake the tasks of (i) team leader, governance and funding structure, (ii) business plan, investment plan, reserve funding,. Individual international insurance and reinsurance expert (s) as well as an international legal expert will be hired on a lump-sum basis to provide specific inputs to the risk modeller and the international consulting team. Catalytics, the open platform risk modelling firm, will be engaged on a single source selection and lump-sum contract basis, to run the model and provide related capacity building for the project management unit.

The qualifications and outline terms of reference for the PPTA consultants are described below:

Financial Specialist/Team Leader. The international expert should have proven senior experience in managing a start-up financial company (insurance or commercial bank), including structuring the corporate investment prospectus and developing the corporate governance guidelines. As team leader this expert will be responsible for all TA outputs and liaison with Government, the private sector and the ADB project officer. The expert will seek and coordinate the inputs of all team members and ensure the quality of technical, financial, and implementation arrangements-related documents. Specifically, the expert will : (i) coordinate with Catalytics on the risk model that will support the structure of the EQ pool; (ii) coordinate with the international financial expert on the preparation of the EQ pool's supporting business plan, investment plan and reserve funding; (iii) develop the appropriate funding structure of the EQ pool to ensure its long term sustainability; (iv) develop the investment prospectus and (v) lead the investor roadshow to ensure appropriate capitalization / funding of the pool. The expert will also lead the recruitment of the Project Management Unit staff and coordinate with Catalytics on the appropriate training of the supporting staff members. The national finance expert will work closely with and support the international expert.

Financial Specialist/Business Plan, Investment Plan, Reserve Funding. The financial specialist will have proven expertise in developing commercially viable plans. The expert will (i) develop and undertake the stress testing of the EQ pool's business plan, investment plan and reserve funding requirements, (ii) assess and provide dedicated IT systems to monitor portfolio exposure database; (iii) develop the operational monitoring mechanisms related to premium collection, claims settlement, and loss assessment. The national finance expert will work closely with and support the international expert.

Finance and Economic Specialist/Team Leader of the national consultants. The finance and economic specialist will have expertise in undertaking market demand for new commercial financial products. The expert will have in-depth knowledge of survey methodologies and data sources, used internationally and in the Philippines. The expert will review the market conditions for non-life insurance product penetration in the Philippines and in coordination with the members of the Working Group, assess the demand for the new EQ insurance cover. The expert will also act as team leader of the national consultants.