Agricultural Risk Transfer

CHAPTER 8Aquaculture Insurance

8.1 INTRODUCTION

Due to overfishing, aquaculture production has grown rapidly to meet the shortfall in the demand for aquatic animals and plants. This has been achieved through intensified production methods and consistent risk management of a large range of risks in different aquaculture systems. Aquaculture is a relatively new industry, with considerable fragmentation ranging from small-scale farms to vertically integrated global firms that produce some of the most economically valuable species. Aquaculture is one of the most efficient ways to produce easily digested, high-quality proteins and while it is the fastest growing food producing sector, it carries some of the greatest risks. Future growth of aquaculture to provide for the increasing demand for seafood is potentially limited due to environmental restrictions, dependence on wild fish for feed and competition for space in suitable locations.

Despite the large growth and industrialisation of large parts of the aquaculture sector, insurance penetration remains low due to limited experience with emerging aquaculture techniques and new species, limited data, fragmentation of the industry, non-standardisation of production methods and diverse perils that impact production. Aquaculture insurance is a highly specialised domain and certainly is the most challenging of all agricultural production assets to insure.

This chapter provides an overview of aquaculture production systems and trends in ...