Taiwan - Precipitation-parameter aquaculture insurance in Pingtung County

Issues and Objectives

The devastation caused by Typhoon Morakot in 2009 remains fresh in the minds of Taiwan's aquaculture industry. At that time, damage to fisheries and facilities across Taiwan exceeded NT$4.6 billion, with grouper farming in Pingtung County alone suffering losses of NT$430 million. Even with the Council of Agriculture's agricultural natural disaster relief mechanism, the subsidies provided were far less than the losses suffered by fishermen. However, in recent years, the frequency of extreme weather events has increased, with extreme heavy rainfall events causing sudden fish deaths and equipment damage for aquaculture farmers in southern Taiwan, such as the torrential rains of August 23, 2018.

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Improvement Measures Taken

In the face of global warming and the arrival of an era of extreme climate change, the Pingtung County Government has been actively promoting various agricultural natural disaster insurance since 2017, including aquaculture insurance. In order to prevent aquaculture farmers from suffering from natural disasters such as rainfall, the county government has started to promote "rainfall parameter aquaculture insurance", which uses the cumulative rainfall data published by the Central Weather Bureau as the basis for claims. Individual damage assessment is not required, and the claims process is simple and fast.

Currently, the insured fish species include giant grouper, tiger grouper, green grouper, small grouper, yellowfin trevally, red snapper, barramundi, Thai shrimp, white shrimp, and sea bass. The premium is 9% of the insured amount, which is shared equally by the central government, local governments, and fishermen. If the insured amount is NT$1 million, the fishermen only need to pay NT$30,000, so as to reduce the burden on fish farmers.

Detailed insurance coverage description:

• Eligibility: Limited to land-based aquaculture operators within the jurisdiction of Donggang Township, Linbian Township, Jiadong Township, and Fangliao Township, Pingtung County, who possess an aquaculture registration certificate and have declared the number of animals raised.
• Insured fish species: Giant grouper, tiger grouper, green grouper, small grouper, yellowfin trevally, redfin snapper, goldeneye sea bass, Thai shrimp, white shrimp, and sea bass.
• Insurance period: During or across the flood season and typhoon season (May 1 to November 30 each year).
• Underwriting and claims: The threshold for claim settlement is a cumulative rainfall of 480 mm over 48 consecutive hours. If the cumulative rainfall reaches 523 mm or more, compensation will be paid out proportionally to the sum insured.
• Insurance premium rate:
  • 9% of the bid amount.
  • In principle, the premiums should be borne by the central government, local governments, and the policyholder, each contributing one-third.
  • During the period of premium subsidy, natural disaster relief cannot be claimed due to rainfall-related disasters.
  • Depending on the actual claim rate, the rate will be adjusted by approximately ±10% every 3 years.

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Results

As of 2020, Pingtung County has been promoting the "Rainfall Parameter Aquaculture Insurance" policy for three years. Practical application and promotion examples include: In 2017, the county experienced its first consecutive typhoons in nearly 50 years. Twelve insured aquaculture farmers received compensation quickly after the disaster (total compensation of nearly NT$20 million), enabling them to immediately support their fish farms and resume breeding and cultivation. In 2018, the southwestern monsoon brought abundant rainfall, causing severe flooding in southern Taiwan. Forty-three insured aquaculture farmers along the southern coast of Pingtung received financial assistance totaling over NT$27 million because their accumulated rainfall reached the threshold for compensation.

Glossary

Climate change risk assessment: Using effective assessment tools to understand the medium- and long-term impacts of climate change on various sectors, and to propose corresponding adaptation strategies and actions to reduce the risks brought about by climate change.

Case type:

Structural and physical options: engineering techniques or reinforcement of existing structures, integrated technology development

Social options: learning and exchanging disaster knowledge in the community, and developing and applying early warning information.

Institutional options: Establishing institutions at the economic, policy, and legal levels

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Reference Websites

屏東縣海洋及漁業事務管理處。https://www.pthg.gov.tw/pt-mfam/News_Content.aspx?n=6D5C643DFE059C95&sms=F759891361FDEEAD&s=2AC47E143C658781

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