Analysis of aquaculture insurance in the local market

Abstract

Capture of fisheries around the world is declining and thus the aquaculture industry has rapidly increased as it serves as an alternative for the production of fish. However, because aquaculture is carried in water, it is perceived as a high risk industry. Although water is a life support for the species it is a carrier of diseases and pollution, and also prone to storm risks. Therefore, an aquaculture insurance policy aims to mitigate these risks while reduce the financial costs to aquaculture producers if such unexpected events occur. The aim of this study was to provide an analysis of aquaculture insurance in the local market. Therefore, the objectives were to grasp an understanding of the growth and development of the aquaculture industry in Malta and evaluate the concepts and processes of aquaculture insurance. Moreover, this study aimed to analyse the local producers' views on the need of having such insurance policy in place while assessing the knowledge and expertise of aquaculture insurance professionals within the local insurance market. General findings of the study established that the need of such insurance policy amongst local producers varies depending on the type of species held and the financial structure of their business. Moreover, the research further pointed out that the majority of those who opt to be insured arrange their cover through the use of international broker. This is mainly due to the fact that the aquaculture industry in Malta is still relatively small and thus, there is not enough local knowledge and expertise on handling aquaculture insurance. However, Malta's strategic position and climate conditions make local aquaculture attractive. Therefore, the study concluded that should the local industry continues to grow and introduces new species the demand for knowledge and expertise on aquaculture insurance amongst local brokers, insurers, surveyors and biologists will continue to increase.