Typhoon forces China’s aquaculture insurance system to adapt
The increased presence of large agricultural conglomerates entering the aquaculture insurance market in China is reshaping the sector as it comes to terms with recent storm damage from Typhoon Lekima, which crashed into China’s east coast last week.
China has struggled to extend insurance cover to the aquaculture sector, with major insurers – most of them state-owned – shying away from the sector due to an inability to price risks.
But reports from Zhejiang Province – one of the worst-hit areas – suggest higher levels of coverage at aquaculture facilities connected or contracted to major agricultural conglomerates. The companies have lately been seeking to diversity further into lucrative aquaculture niches, such as feed and medicine, while also investing in large new offshore fish farms.
Zhejiang Provincial Mutual Insurance Association, whose members include aquaculture producers including several corporations that own or purchase from local aquaculture farms, has been offering compensation to aquaculture firms crippled by the typhoon.
The association paid out CNY 90,000 (USD 12,780, EUR 11,524) to the Blue Ocean Ecological Industry Development Co., which saw 32 of its near-shore deep-sea cages (producing croaker) ruined by the typhoon.
“We are seeing a lot of damage to aquaculture facilities and we send teams to investigate and then to enable the aquaculture companies to recommence production,” said Yu Xian Lin, head of the Shengsi divisional office of the Zhejiang Provincial Mutual Insurance Association. Shengsi is part of the Zhoushan city, one of China’s leading fishery ports.
Regional governments in China have sought to implement subsidized insurance programs, which makes insurance more affordable to the aquaculture sector. However, government programs have been criticized for a “one size fits all” model that often lacks flexibility that private-sector operators require.
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