Swiss Re enters aquaculture insurance partnership with Taiwan Fire & Marine
Swiss Re and Taiwan Fire & Marine Insurance have partnered to jointly offer first parametric aquaculture insurance solution to cover onshore fisheries against extreme rainfall in Taiwan's Ping Tung Country.
It will protect grouper fish producers from flash flood, which may cause overflowing of onshore fisheries and escape of the fishes, resulting in a loss of fish stock.
The innovative insurance solution, the first in Taiwan, uses meteorological data to allow faster payout, reducing the time that is needed to settle claims and reducing the ambiguity of quantifying loss incurred for the fish farmers, according to the statement.
The company stated that its insurance scheme will eventually cover 120,000 hectares of grouper fish farms, generating a production of 25 million kg of fishes in Taiwan annually for local consumption and export to Asian markets, making the fisheries sector in Taiwan more resilient.
David Alexander, head of property and casualty for Hong Kong and Taiwan of Swiss Re, said: "Unlike traditional insurance which pays after the fish farmers make a claim by quantifying the losses they have incurred from the heavy rainfall and flooding, this insurance payout is based on a defined trigger, in this case the amount of rainfall experienced. This means that fish farmers can receive their payout faster, reducing the time that is needed in claims process and settlement."
"When the warning signal of typhoon or rainfall is hoisted, fisheries can deploy means of risk prevention and mitigation actions, which would incur a cost. Fish farmers can now cover this cost through the aquaculture index-based insurance or use the payout to replace the damaged fish stocks," added Harini Kannan, head of agriculture reinsurance in Asia (ex-China) of Swiss Re.
"Through the mechanism of the parametric insurance, we want to build resilience for the local fisheries and close the protection gap of the aquaculture industry in Taiwan. We are proud to see that our first parametric aquaculture insurance solution has attracted strong interests, which we hope will benefit other countries within Asia in the near future."
In summer 2009, Taiwan experienced a series of typhoon which carried significant rain to the southern part of the country. The fisheries in Ping Tung County suffered significantly as the fish ponds were overflown with rainwater and nearly 50 percent of the fisheries sector was wiped out. This resulted in an estimated loss of TWD 1.7 billion (USD 56 million).
This is the second insurance solution launched in Taiwan by Swiss Re for the agricultural sector, in response to Taiwan Government's initiative in developing insurance solutions for farmers and fisheries. The first being the indemnity insurance for pears launched in 2015 for the farmers in Taiwan.
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