Taiwan - Promotion of temperature-parameter aquaculture insurance

Issues and Objectives

Aquaculture is vulnerable to natural disasters such as torrential rains and cold weather. Although the government has established a system of cash relief, subsidies, and low-interest loans to cover some of the fishermen's losses, fishermen still have to absorb the losses themselves and wait for specialists to assess the damage on-site. However, this approach cannot help fishermen transfer the losses caused by abnormal weather in a timely manner, or help operators quickly engage in fishpond restoration and restocking to minimize fishery losses.

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Improvement Measures Taken

Aquaculture is vulnerable to natural disasters such as torrential rains and cold weather. While the government has established cash relief, subsidies, and low-interest loan systems to cover some of the fishermen's losses, they still need to absorb the losses themselves and wait for on-site assessments. Commercial insurance uses temperature parameters as the basis for claims, and once the agreed-upon timeframe is reached, claims can be processed quickly, alleviating the financial pressure on fishermen. In response to government policies promoting agricultural and aquaculture insurance, Fubon Insurance launched grouper and milkfish insurance in 2017 and 2018, providing low-temperature and cold-damage insurance coverage for aquaculture fishermen in Yunlin, Chiayi, Tainan, Kaohsiung, and Pingtung, thus increasing the insurance coverage rate for Taiwan's aquaculture industry.

Under the guidance of the Fisheries Agency of the Council of Agriculture, a low-temperature (cold damage) insurance for aquaculture has been launched. When the temperature is below 10 degrees Celsius for 10 consecutive hours, the claims process will be initiated. There is no need to wait for a special person to inspect the situation and it is not subject to the limitation of delayed damage. It can help fishermen transfer the loss of fishery products caused by abnormal weather in a timely manner.

In 2019, the coverage was further expanded to include sea bass and tilapia, providing low-temperature damage insurance for aquaculture farmers in Yunlin, Chiayi, Tainan, Kaohsiung, and Pingtung, thereby increasing the insurance coverage rate for Taiwan's aquaculture industry. Fubon Insurance has expanded its low-temperature (cold damage) insurance for sea bass and tilapia this year, with coverage amounts of NT$500,000 or NT$1,000,000 for sea bass and NT$300,000 or NT$600,000 for tilapia, allowing fishermen to choose the appropriate insurance coverage based on their actual needs. Premiums vary depending on the county/city and fish species, with the Fisheries Agency subsidizing one-third. For example, for sea bass farmers in Chiayi County who insure for NT$500,000 per hectare, the Chiayi County government's additional subsidy of one-third of the premium means that the minimum out-of-pocket premium for each hectare is less than NT$40,000.

Detailed explanation is as follows:

• Insured species: Grouper (Giant, Green Grouper, Tiger Grouper), Tilapia, Milkfish, and Sea Bass.
• The following areas are eligible for investment: Chiayi, Tainan, Kaohsiung and Pingtung (grouper, green grouper, tiger grouper), Yunlin, Chiayi, Tainan, Kaohsiung and Pingtung (tilapia, sea bass), Changhua, Yunlin, Chiayi, Tainan, Kaohsiung and Pingtung (milkfish).
• Product Features: Provides protection against low-temperature damage to aquaculture fishermen.
• Coverage: Losses due to grouper mortality caused by temperatures below 10 degrees Celsius for more than 10 consecutive hours (based on data from the Central Weather Bureau).
• Coverage risk: Low temperature damage.
• Insurance period: from November 1st to March 15th of the following year.
• Self-paid allowance (per incident): 15%, 25% or 35% (grouper (giant, green grouper, tiger grouper), milkfish), 15% (tilapia, sea bass).
• Product Features:
  1. The claims process is based on temperature data released by the Central Weather Bureau, eliminating the need for individual farmers to assess the damage, making the process simple and quick.
  2. If the temperature has been below 10 degrees Celsius for 10 consecutive hours, the claim process can be initiated.
  3. Using data published by designated weather stations ensures the credibility of the data source and reduces disputes in claims settlement.
  4. To alleviate the burden on farmers, the government provides premium subsidies of up to 2/3。
• Product Approval Numbers: Approved by the Financial Inspectorate on September 30, 2017 (Grouper (Giant Grouper, Green Grouper, Tiger Grouper)); Approved by the Financial Inspectorate on November 18, 2019 (Tiger Fish); Approved by the Financial Inspectorate on November 18, 2019 (Milkfish); Approved by the Financial Inspectorate on November 18, 2019 (Sea Bass).

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Results

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Reference Websites

1. 行政院農委會漁業署。https://www.coa.gov.tw/theme_data.php?theme=publication&id=5641。
2. 富邦產險－農作物產險。https://www.fubon.com/insurance/b2c/content/farm_insurance/index.html。

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