Comparative Study On Aquaculture Insurance Market

There is a general conception that aquaculture is a high-risk industry and mainly consisted by small-scale aquaculturists. With the rapidly changing production processes in aquaculture worldwide, the demand for insurance to share and cover these perils has greatly increased. However, the high risks and low profits gained by the company not only seriously constrained the development of aquaculture insurance market, and also compelled the underwriters to withdraw their operation at the end of last century. The current situation is that aquaculturists'interests could not be protected, which could even make them bankrupt if there were no insurance covering. Although there is a huge "gap" between the demand and supply in aquaculture insurance market, the awareness and the relative research go out of fashion in China.The SCP framework is used for comparative analysis in this study. The development of aquaculture, the current state and the operation of aquaculture insurance market are compared between China and abroad by time and space separatedly.The study should draw the conclusions that:(1)China, like other parts of the world, has the widespread demand for aquaculture insurance; (2)As far as aquaculture insurance market is concerned, Europe is the best served region in the whole world for its sophisticated insurance market and brokers and technical loss adjusters; (3)The experiences in North America and Oceania illustrate that it is necessary to set up some risk management processes to handle sudden disasters; (4)Aquaculture insurance policies in Asia are generally of the "named perils" type, Japanese government's powerful support popularizes the insurance market; (5)South America proves stakeholders should cooperate closely and the performance of aquaculture insurance market differ between years, unprofitable case alternating with profitable case; (6)The development of aquaculture insurance in Africa is embarrassed by basic foundations seriously. The study also should clarify the main factors restricting the development of aquaculture insurance market in our country as following:(1) The government lacks of knowledge of aquaculture insurance and dose not support the market by making policies effectively; (2) The lack of standards in mutual assurance puzzles the insurance market; (3) The high loss ratio leads aquaculture insurance market to drop behind in the competition among different insurance kinds; (4) Reinsurance is difficult to be acquired; (5) Asymmetric information always exists.The recommendations originating from the study are concluding:(1) The aquaculture underwriters should increase investment in promoting the aquaculture insurance services more widely and enhance their operational capability, they also should speed up the design of aquaculture insurance policies that better suit the needs of aquaculture entrepreneurs; (2) The government should recognize aquaculture insurance as an integral part of aquaculture development and design policies like finance assistance or tax relief; (3) Aquaculturists not only should increase awareness and enhance cooperation with each other or with underwriters, but also should improve the capability of forecasting hazards.