Look at weather indices rather than impacts for better fisheries insurance: experts

In a background of increasing market pressure and changing climate marked by intensifying storms, extreme weather and uncertain seasons, fishers find insurance cover often inadequate.

While fishers’ life insurance schemes perform well, their assets are inadequately covered, experts note. They suggest better coverage, collaboration and innovative measures such as tying insurance to weather events instead of their adverse outcomes.

“In the capture fisheries sector, fishermen’s accident and insurance schemes have performed quite well, with high subscription rates and forward-looking underwriting experiences,” noted a recent UN Food and Agriculture Organization (FAO) status report, World review of capture fisheries and aquaculture insurance 2022, in its India section.

India is the fourth largest marine and inland capture fisheries and the second largest aquaculture nation. Fisheries support 16 million people at the primary level and twice the number up the value chain, the FAO report noted.

Life and disability are fairly well covered in collaboration with fishers’ cooperatives in Kerala and Tamil Nadu states, noted the report. However, even that coverage is not uniform elsewhere in the country.

Group insurance schemes that offer flexibility are especially popular. However, only an estimated 3 to 4% of all fishing craft in India hold vessel insurance. Even when fish farms face the impacts of extreme weather events, major aquaculture hubs are left out of insurance coverage, the report pointed out.

Several central and state government schemes cover risks the fishers face. The central scheme Pradhan Mantri Matsya Sampada Yojana offers Rs. 500,000 (Rs. five lakh) life/disability cover for fishers, about half the amount, Rs. 250,000 (Rs. 2.5 lakh), for partial disability and Rs. 25,000 for hospitalisation.

Cooperatives such as the state-run Matsyafed in Kerala and the independent South Indian Federation of Fishermen Societies (SIFFS) popularise and facilitate government insurance schemes, the FAO report noted.

Local experiences confirm these reported trends. A recent study in the Ernakulam district of Kerala showed that in a sample of 100 traditional vessels, all were insured by a scheme bundled with credit offered by Matsyafed. However, a matching sample of trawlers in the same study area showed marginal coverage. High premiums, inadequate coverage of the loss and delays in settlement of indemnities discouraged trawler owners, the study by A. Suresh and Kiran Vijay of Central Institute of Fisheries Technology in Kochi reported.

Mounting risk in a changing climate

Recently, fishers have been investing significantly in engine, gear, navigation systems and information and communication technologies, pointed out Shinoj Parappurathu, a senior scientist at the Central Marine Fisheries Research Institute, Kochi, who wrote the India section of the FAO status report. “The risks in capture fisheries include a variety of factors such as loss or damage to fishing vessels, equipment and gear in operation, loss of catch and human casualties in the sea,” he noted in a new paper on marine fisheries insurance. Small-scale fishers and boat owners are particularly vulnerable to such risks. Mariculture activities are also vulnerable to climate change and disease outbreaks, he added.

While the total damage to the hull and engine of the marine fishing boats is well covered, few independent schemes include the loss of equipment and gear. As the FAO report pointed out: “(F)ishing asset insurance, coastal immovable asset insurance, which are intended to protect fishers from extreme weather events and freak accidents in the sea, have remained more or less a non-starter.” Households and related assets are frequently damaged in high wave events, storm surges, coastal flooding and erosion as media reports suggest.

Fishing is one of the most risk-prone activities and most accidents happen in the small-scale sector. More than 100,000 fishing-related deaths happen every year, estimates a new global report estimates. Scarcity of fishing, overfishing, and poverty often drives risk taking in fishing, as the FISH Safety Foundation study notes.

Local media reports show that during 2016-2021, 327 fishers died off the shores of Kerala state, 145 of them from Thiruvananthapuram district, home to 50,000 largely artisan fishers on small boats. The figure excludes the casualty figure of the 2017 cyclone Ockhi that claimed another 143 lives of Kerala fishers, mostly from Thiruvananthapuram.

Increasing costs

Amidst competition and stock depletion close to the shore, fishers often brave rough weather and go to the deep ocean, requiring significant investment in vessels, gear, navigation and communication equipment.  A 32-foot, bare fibre glass boat, the fishers of the southwestern coast usually use, costs more than Rs. 200,000 (Rs. two lakh). Its two outboard motors cost another Rs. 100,000 (Rs. one lakh) and fishing nets Rs. 100,000 (Rs. one lakh) or more depending on their size and type. When suddenly caught in rough weather, fishers often have to cut off their net and rush to the shore.  The net in the sea would drag the boat and pulling it in takes an hour or two. “We just cut off the net and escape,” said Davidson Anthony Adima, a fisher in Thiruvananthapuram.

A 60-foot-deep sea boat meant for tuna and shark hunting in the water near the Lakshadweep Islands can cost Rs. 66 lakhs (Rs. 6.6 million). Often, they are accompanied by two or three 34-foot boats in tow. “When we are caught in storms, we just cut loose and abandon these boats,” said Robinson Remmy, a deep-sea tuna fisherman from Kanyakumari district. Besides, fishers incur more losses due to aborted and delayed fishing trips. As intense storms and dangerous sea states are becoming more frequent, and marine weather systems are intensifying, such losses are increasing, noted a recent report of the Bay of Bengal Program. Even boats docked in harbours get damaged with no compensation, the report noted.

Of late, there are frequent weather warnings issued by state government agencies as well as the national forecasters. Besides, there are monsoon bans on mechanised fishing in the Bay of Bengal and the Arabian Sea.  Citing fishers at the Chennai Fishing Harbour, the Bay of Bengal Program study noted that their workdays had reduced from 210 to 150 over the past decade due to an increase in the monsoon ban period from 45 days to 60 days and increasing weather disturbances.

Bottlenecks, red tape

Fisheries experts note that insurance claims require inspection by specialists. “Getting expert opinion could be time consuming,” said Vincent Jain, Deputy Chief Executive of SIFFS based in Thiruvananthapuram. Jain used to conduct inspections for vessels in Tamil Nadu. “Ensuring insurance coverage for fishers’ assets requires large-scale initiatives from the government and other institutions,” Jain said.

On ground, claiming insurance is often time-consuming. “Often, after losing an outboard engine, we do not claim insurance, instead just buy a new one and move on,” said a fisherman in southern Thiruvananthapuram on condition of anonymity. “We cannot afford to lose a few days’ work for the paperwork.”

Insurance proceedings can be complicated and often government officials, who handle most of these schemes locally, play favourites with politically influential clients, alleged Valerian Isaac, the Thiruvananthapuram district president of the Kerala Independent Fishworkers’ Federation. “It is necessary to ensure that fisheries insurance is efficient, transparent and fair to all,” he said. However, the local fisheries extension officer of southern Thiruvananthapuram who is not an authorised media spokesperson, said fishers need to keep their insurance papers handy to claim benefits and missing any of them often cause delays. “We conduct awareness programmes for fishers in different venues,” she said.

Weather index-based insurance

The FAO report called for “customised and affordable products” to suit the specific needs of diverse fishers in different regions. “This mainly involves a clear understanding of the risk profile, levels of affordability, income stream patterns, borrowing, and repayment behaviour. It also requires an understanding of attitudes towards risk management solutions, as well as the value systems and morality of the target populations.”

“There is immense scope to reform the coastal asset and fishery insurance,” Parappurathu noted. He also highlighted technology-based solutions such as weather index-based insurance scheme informed by weather stations and satellite data as those prevalent in the farm sector. Vessel monitoring systems that track offshore fishing forays could be another contributing measure, he added.

The Bay of Bengal Program recommended a judicious mix of traditional and parametric insurance solutions such as the weather-indexed schemes. In the latter, a pre-agreed payment could be made based on an index of weather events.

Suresh and Vijay suggest that India’s crop insurance schemes offer valuable lessons in that adverse weather in a specific geographical area can trigger insurance payments. The whole system can use smart information and communication technologies to streamline and speed up insurance processing.

Banner image: Fishing boat heading out to sea in Tamil Nadu. Photo by Timothy A. Gonsalves/Wikimedia Commons.