Offshore fish farming facilities: Challenges for marine insurers

By Wang Xing, Senior Marine Underwriter, Vice President, Property & Specialty Underwriting, Swiss Re Asia Pte. Ltd. and Member of the IUMI Inland Hull, Fishing and Yacht Committee

Offshore fish farming is rapidly emerging as a sustainable alternative to commercial fishing, while supporting the needs of an increasing global population. In Asia, China alone is anticipating several hundreds of offshore fish farming facilities by 2025 - a new era in fish farming is underway. 

As the offshore fish farming business continues to become a niche area of growth, insurers need to develop solutions with comprehensive coverage to address the unique set of risks for offshore fish farms. There are several design and structure technicalities, functionalities and operational aspects to consider. How complex is the environment where the facilities operate? How do we power deep-sea fish farms? What are the insurance needs of mechanical engineers maintaining the operation? These are just a few examples of complex risks to consider.  

Offshore fish farms require several insurance policies to satisfy the owners' needs for risk protection. Some of the questions an underwriter should ask when assessing offshore fish-farming operational risks include:

  • Is the design and operation system environmental-friendly and safe?
  • How can pollution risks arise, how adverse can they be and what impact will they have? 
  • How complex is the structure, and how would it respond to climatic conditions where it operates?
  • If leisure functionality is included, is insurance required for passenger liabilities?
  • With ancillary set-ups and activities, would there be an increase in the risk of hazards such as fires?
  • Are the operating crew properly trained?
  • Are periodic condition surveys planned and timely executed?

Sound risk management procedures and loss prevention measures should also be considered.

Offshore fish farming will become instrumental in compensating and restoring diminishing ocean resources while supporting global seafood production. To enable the development of offshore fish farms and a more sustainable future, insurers need to look beyond property risks and create comprehensive insurance solutions for the offshore fish farming industry.

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