Many classes of insurance are described as “niche” when in reality they are widely available. However, it is fair to say that Aquaculture Insurance is genuinely a niche and specialist product.
As global demand for seafood continues to grow, aquaculture has become one of the fastest-expanding food production sectors. Fish farmers operate in complex and often challenging environments, where environmental, biological and operational risks can have a significant impact on stock and profitability. For this reason, specialist insurance solutions play an important role in protecting aquaculture businesses.
Fish farmers will typically look to arrange Stock Mortality insurance, either on a Named Perils or All Risks basis. However, the challenge for many operators is that, other than in countries such as Norway where aquaculture insurance is more established, there are relatively few insurers willing to provide cover on a direct basis.
Support is often available from European reinsurers on a facultative reinsurance basis, although this is usually in support of one of the limited number of direct insurers in the market. In most cases, these insurers will set the policy terms and conditions.
Where to turn for specialist insurance?
To access these markets effectively, fish farmers generally require the support of an insurance broker with specialist knowledge of the aquaculture sector. A broker with experience of the industry will understand how insurers assess the risks and how to present the operation in the best possible light. Without this expertise, a fish farmer may receive a quotation that is unattractive or does not provide appropriate protection.
There are a number of key factors that insurers and brokers need to consider when assessing an aquaculture risk, including:
- Storm exposure – What is the level of storm risk and are the cages and moorings suitable for the location of the farm?
- Disease risk – Where does the fish farmer source their juvenile stock and what health management procedures are in place?
- Environmental risks – Is the farm located in an area that may be susceptible to harmful algal blooms or low dissolved oxygen events, both of which can cause sudden and significant stock losses?
- Water supply and biosecurity – For onshore farms, where is the water sourced from, how is it treated, and what biosecurity measures are in place to prevent contamination or disease?
Environmental monitoring and farm management practices have evolved significantly in recent years, with many farms now using advanced monitoring systems to track water quality, oxygen levels and environmental conditions in real time. While these improvements help manage risk, aquaculture remains a sector where careful underwriting and specialist knowledge are essential.
Aquaculture support
When a claim occurs, it is vital that the insurance broker understands both the aquaculture operation and the circumstances of the loss. The broker will often work closely with the loss adjuster to ensure that all relevant information is gathered before the claim is presented to insurers. This approach can help streamline the process and ensure that claims are assessed and settled as quickly as possible.
Ae Insurance has that specialist capability. Mark Seward has worked within the Aquaculture Insurance industry for over 30 years, arranging policies with insurers from across the globe and visiting countless fish farms. This experience enables Ae Insurance to provide knowledgeable support to aquaculture operators seeking appropriate insurance protection. Reach out to us when you need specialist support.