The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) Bangladesh Insurance Sector Development Project (P156823) SOUTH ASIA | Bangladesh | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2017 | Seq No: 10 | ARCHIVED on 25-Dec-2021 | ISR47514 | Implementing Agencies: PEOPLE'S REPUBLIC OF BANGLADESH, Insurance Development and Regulatory Authority (IDRA), People's Republic of Bangladesh Key Dates Key Project Dates Bank Approval Date: 20-Mar-2017 Effectiveness Date: 08-Jul-2018 Planned Mid Term Review Date: 12-Oct-2020 Actual Mid-Term Review Date: 12-Oct-2020 Original Closing Date: 31-Aug-2022 Revised Closing Date: 31-Aug-2022 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to strengthen the institutional capacity of the regulator and state-owned insurance corporations and increase the coverage of insurance in Bangladesh. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Improving the Capacity of the Insurance Development and Regulatory Authority (IDRA) and the Bangladesh Insurance Academy (BIA):(Cost $30.00 M) Modernization, Strengthening and Increasing the Efficiency of the State-owned Insurance Corporations:(Cost $45.00 M) Project Implementation, Management, and Monitoring:(Cost $5.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The project was approved by the Board on March 20, 2017 however, it became effective only 16 months after on July 8, 2018. After recruitment of the PIU staff and appointment of the Project Director (PD), project implementation effectively started only in March 2019. At the time of May 2021 mission, out of 21 result indicators, six indicators were fully achieved or overachieved, and the remaining 15 indicators were non- compliant or in progress. The 16-months delay with the launch of the project implementation, the recent COVID-19 disruptions and nearly 6-month delay in awarding one key consultancy contract (now awarded) resulted in significant underperformance and delay in complying with the project results indicators. Nonetheless, the authorities confirmed their commitment to implement the project as designed and meet the project development 12/25/2021 Page 1 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) objective (PDO), with slight modification requested to the project results framework as part of the restructuring. The Bank team was assured by the PIU and the authorities that the project procurement will be launched before the end of 2021 and fully completed in 1Q-1H2022. Since the time of the May 2021 mission, per agreement with the Bank, 3 key preconditions for the project restructuring were fully met. These are (i) signature of the S2-1 international consultancy contract for regulation/supervision consultancy; (ii) selection of a contractor and signature of the contract for the citizens engagement survey S-15, and (iii) launch of IDRA recruitment process for technical/supervisory staff. Based on the above, the Bank will prepare the project restructuring package as discussed during the May 2021 mission and confirmed in the IDRA letters of March 15, 2021 and October 4, 2021. Per agreement with the authorities, the restructuring will include (i) extension of the project closing date by 18 months from August 31, 2022 to February 28, 2024, and (ii) minor modifications to the project results framework without changing the PDO as theory of change remains relevant and achievable, especially upon extension of the project closing date with the proposed restructuring. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High Substantial Substantial Macroeconomic Moderate Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- Moderate Moderate Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Project Development Objectives Indicators IN01016069 ►Adoption and Implementation by IDRA of smart risk-based supervision (Percentage, Custom) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 70.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 12/25/2021 Page 2 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) IDRA is in the progress of reforming insurance market regulation and supervision framework and adopting Comments: risk-based supervision process in line with the best practice. IN01016070 ►Number of insurance policy holders (life and non-life) (Number, Custom) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 17,000,000.00 24,098,520.00 27,191,922.00 22,000,000.00 Date 31-Dec-2015 14-Jan-2021 31-May-2021 31-Aug-2022 Overall Comments PDO Despite negative impact of Covid-19 pandemic, the number of insurance policy holders is increasing; use of insurance services was especially important during Covid-19, as the domestic insurance companies and the two state owned insurance companies - JBC and SBC - were at the frontline and were actively participating in mitigation of Covid-19 costs and helping businesses, households and the public sector to cope with the growing costs and share the risks. The project beneficiaries have developed special products to enhance medical/health insurance coverage and streamline life insurance offering to the clients in Bangladesh. Special products were developed for Covid-19 first respondents (doctors, police, firefighters etc), as well as migrant workers. Sale of insurance policies during the lockdowns was constrained by absence of digital products and underdevelopment of digital distribution channels. Hence, the authorities confirmed the growing importance of the project to increase digitalization and technological preparedness of the project beneficiaries to respond to catastrophic events such as Covid-19, as well as enhance their capacity and efficiency to better serve the needs of the clients in the future. Along with development of new insurance services and enhance market regulation and supervision, this will contributed to increased insurance market penetration and growth of insurance policy holders. Intermediate Results Indicators by Components Improving the Capacity of the Insurance Development and Regulatory Authority (IDRA) and the Bangladesh Insurance Academy (BIA) IN01016071 ►Insurance companies follow off-site monitoring templates issued by IDRA (percent of companies) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 57.00 0.00 70.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 The end target envisions that 70 percent of registered insurance companies provide reports to IDRA Comments: under the new offsite reporting templates IN01016074 ►On-site inspections of insurance companies performed annually by IDRA (Number of companies, Custom) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 34.00 0.00 30.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 The number of insurance companies for which IDRA completed onsite examinations during the reporting Comments: year. Due to Covid-19 pandemic, all onsite examinations have been suspended. IN01016077 12/25/2021 Page 3 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) ►Solvency margin rule for insurance companies issued by IDRA and implemented (yes/no) (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 IDRA as the insurance regulatory agency is expected to issue new solvency margin regulation for Comments: insurance companies in line with international standards. IN01016080 ►Corporate governance regulations issued by IDRA are followed by insurance companies (percent of market share) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 60.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Implementation of this reform has been delayed by the project procurement delays. Since October 2021 mission, the contract with international consulting firm has been finally signed and IDRA is expected to Comments: prepare and enact the requirements for enhanced governance of insurance companies in 2022. IN01016082 ►Insurance Companies follow Claims Management Methodology issued by IDRA (percent of companies) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 70.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Implementation of this result indicator has been delayed by procurement delays under the project. Now, with the international regulatory/supervisory consulting firm contracted and procurement of IT/MIS Comments: underway, this indicator is expected to be met in 2022-2023. IN01016084 ►Insurance companies issue key facts statements to policy holders following new Consumer Protection regulations issued by IDRA (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 80.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 IN01016086 ►Mortality and Morbidity tables produced (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Implementation of this result indicator is underway and is assisted by the consulting company under the Comments: project IN01016088 12/25/2021 Page 4 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) ►National Social Insurance Scheme (NSIS) Study conducted (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 29-Dec-2017 14-Jan-2021 14-Jan-2021 31-Aug-2022 The study was conducted by the authorities under another project and proposed to be dropped from this Comments: project. IN01016089 ►Number of people who receive ABIA Diplomas and Cerficates (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 141.00 141.00 600.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Training and certification has been disrupted by COVID-19, but is expected to catch up once the situation Comments: will stabilize and the lockdown will be lifted. Modernization, Strengthening and Increasing the Efficiency of the State-owned Insurance Corporations IN01016072 ►Life Insurance policies that lapse after one year at JBC (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 50.00 9.38 8.14 30.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 IN01016075 ►Total number of policy holders at JBC and SBC (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 463,000.00 488,316.00 532,794.00 550,000.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 IN01016078 ►Net Claims ratio at JBC (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 66.00 60.58 95.75 80.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 IN01016081 ►Net Claims ratio at SBC (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 12/25/2021 Page 5 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) Value 35.00 46.17 42.06 60.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 IN01016083 ►Premium growth rate at JBC (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 7.00 11.21 0.01 15.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Covid-19 lockdowns have negatively impacted ability of the state insurance companies to sell new policies, as their regional offices and agents have been closed. JBC also had significant payouts to meet Comments: the customers claims. As a result, JBC premium growth in 2020 was negative at 3.4 percent. It is expected to improve in 2021 and after the pandemic is over. IN01016085 ►Premiums growth rate at SBC (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 7.00 24.94 18.16 15.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 The indicator was achieved in spite of negative impact of Covid-19 pandemic. Comments: IN01016087 ►Solvency margin rule issued by IDRA is implemented by JBC and SBC (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Project Implementation, Management, and Monitoring IN01016073 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 14,987.00 500,000.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 Number of project beneficiaries - new clients of JBC and SBC Comments: IN01016076 Female beneficiaries (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target 12/25/2021 Page 6 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) Value 0.00 0.00 4,395.00 150,000.00 IN01016079 ►Direct project beneficiaries who feel that project investments reflected their needs (percentage) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 80.00 Date 29-Dec-2017 14-Jan-2021 31-May-2021 31-Aug-2022 The survey firm for citizens engagement survey (CES) per World Bank Corporate requirements has been contracted in October 2021 (contract S15 signed by the PIU). Two surveys are expected to be conducted, Comments: one in 2021-2022 (baseline), and the second before the project completion. Overall Comments IR The implementation of the project results framework has been negatively impacted by the 16-months delay in the project effectiveness, slow procurement (as many of the results indicators are directly linked to the implementation of consulting services and IT/MIS investments) and were distorted by the COVID-19 pandemic in 2020-2021. Out of 21 indicators, 6 were fully met or overperformed in May 2021 (based on end 2020 results), and 15 were in progress at different stages of implementation. It is expected that implementation of the consulting activities and acceleration of procurement of IT/MIS will help the beneficiary agencies implement the results, however, extension of the project closing date is warranted to allow sufficient implementation time and compensate for the time lost due to late effectiveness and COVID disruptions/lockdowns. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P156823 IDA-59720 Effective USD 65.00 65.00 0.00 9.70 57.30 14% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P156823 IDA-59720 Effective 20-Mar-2017 10-Apr-2018 08-Jul-2018 31-Aug-2022 31-Aug-2022 Cumulative Disbursements 12/25/2021 Page 7 of 8 The World Bank Implementation Status & Results Report Bangladesh Insurance Sector Development Project (P156823) PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/25/2021 Page 8 of 8