Risk-sharing in the context of fishery mutual insurance: Learning from China
Although China remains the largest producer in the fishery industry worldwide, it faces substantial personal injuries and economic losses created by this sector. Considering insurance is a mechanism that potentially could deal with fishery-related losses, China set up private fishery insurance in the 1980s, but it largely failed in the 1990s. Over the past twenty-six years, China has developed an alternative financial mechanism, called fishery mutual insurance (FMI) to spread out risks, among which a large number of members are individual fishermen and owners of small-scale fishing vessels. Since 2008, there has been increasing financial support for FMI provided by the government. Guided by non-profitable FMI associations, FMI becomes a model of sharing risks among fishermen that create risks, which is substantially more like a risk-sharing agreement than a form of insurance. The paper analyzes the potential of this risk-sharing agreement in minimizing the total social costs of fishery-related activities in comparison to private insurance. Special interest is also given to identifying the problems that will constrain the promotion of FMI in the context of China.
Jiang, M. (Minzhen), & Faure, M.G. (2020). Risk-sharing in the context of fishery mutual insurance: Learning from China. Marine Policy. doi:10.1016/j.marpol.2020.104191