Risk-sharing in the context of fishery mutual insurance: Learning from China. (November 2020)

• Record Type: Journal Article
• Authors: Jiang, Minzhen; Faure, Michael
• Is Part Of: Marine policy. Volume 121(2020)
• Publication Date: 2020-11
• Subjects: Fishery mutual insurance (FMI) -- Risk-sharing -- Government subsidy; Marine resources -- Economic aspects -- Periodicals; Fisheries -- Periodicals; Ressources marines -- Aspect économique -- Périodiques; Pêches -- Périodiques; Fisheries; Marine resources -- Economic aspects; Periodicals; 333.916405
• DOI: 10.1016/j.marpol.2020.104191
• Languages: English
• ISSNs: 0308-597X

Abstract

Abstract: 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.