P.A.D. Secretan
Managing Director,
AUMS
Aquaculture insurance is not widely used in sub-Saharan Africa. A small number of operations in South Africa may be insured, however, but no information is available on the claims experience.
Aquaculture production in sub-Saharan Africa in 2004 was estimated at around 93 000 tonnes. This figure implies a considerable increase compared to the 39 000 tonnes estimated in 1995. The main aquaculture species in sub-Saharan Africa in 2004 are catfishes (with a production volume of around 33 000 tonnes), tilapia (around 20 000 tonnes) and giant tiger prawn (over 7 000 tonnes). Nigeria is the largest producer, assuming 44 000 tonnes of the total estimated for 2004. South African production was estimated at 6 000 tonnes, consisting mainly for 45 percent of aquatic plants, 1 000 tonnes of rainbow trout, some 760 000 of abalone and around 700 tonnes of Mediterranean mussel. Other important aquaculture producer countries in the region in 2004 were Madagascar (8 700 tonnes), Tanzania (6 000 tonnes/mainly seaweeds), Uganda (5 500 tonnes) and Zambia (5 000 tonnes).
The value of the total aquaculture production of the sub-Saharan African was estimated in 1995 to be around US$91 million. This amount has increased since. In 2004 the estimated value was US$252 million. The main products in value terms in 2004 were North African catfish (US$50 million in Nigeria), torpedo shaped catfishes (US$35 million in Nigeria), giant tiger prawn (US$31 million/Madagascar) and Perlemoen abalone (US$25 million in South Africa). With regard to the latter product, it should be noted that the South African abalone production was valued only US$22 000 in 1995. The value of production of the main sub-Saharan African aquaculture species continues to show an increasing trend.
The African Insurance Organization (AIO), established in 1972, has a membership of insurers, reinsurers, brokers, supervisory authorities, as well as institutions and associations throughout the continent. Its objective is to promote and develop a healthy insurance industry and reinsurance industry in Africa.
With the exception of South Africa, and only to a small degree, aquaculture insurance does not appear to be widely used across the African continent. Almost all countries in sub-Saharan Africa are in theory served by local offices of the major national and international insurance brokers, so that the international aquaculture insurance market should be accessible to producers in each of the countries. However, in practice this is not the case.
It was not possible to conduct a survey of the demand for insurance among African aquaculture producers. However, it is reasonable to assume that the demand for insurance services among commercial aquaculture enterprises is similar to that of aquaculture producers everywhere else. Aquaculture entrepreneurs seek competitive cover and premiums, appropriately designed application forms and procedures, policy wordings that are well drawn, free of ambiguity, clear and understandable, and finally effective claim handling and payment, all supported by a comprehensive risk management framework.
A very limited number of policies have been issued in South Africa, but no precise information is available on the number of farms insured. Less than ten shrimp farms in Madagascar are currently insured, but it is believed on a very limited "named perils" basis, as part of a trial to see if insuring shrimp farms is viable. It is believed that no insurance policies are in effect in Nigeria, Zambia and Zimbabwe, the other countries reviewed.
The cover offered by insurers to aquaculture enterprises in sub-Saharan Africa is not much different from that in other regions. Aquaculturists in South Africa have a choice of "all risks" or "named perils" terms and conditions, with rates, self-insurance factors and excluded perils, which is structured to meet the physical location, layout and management standards of each individual insurance applicant. As is the case in other regions and countries, in certain situations individual perils will assume a higher profile than in others, and insurers will structure their policy terms and conditions accordingly.
The international aquaculture insurance market will provide cover on most of the species being farmed, including the most commonly cultured species in sub-Saharan Africa, which are catfish, tilapia, shrimp and carp. However, so far shrimp in pond culture systems is insured only in Madagascar and on a trial basis; in other countries of the region no shrimp insurance services are provided. Extensive shellfish operations and very new candidate species will also be difficult to insure. No comprehensive information is available on the species insured in the region or the percentage of the production insured. It is believed, however, that a small portion of the abalone and trout production in South Africa is currently insured.
International aquaculture insurance companies will provide cover on species reared in most intensive and semi-intensive aquaculture systems, again, with the possible exceptions of prawns/shrimp in ponds and extensive shellfish operations. Information on the systems insured in the region does not appear to be available.
Insurers require extensive information on every production operation offered for insurance, and all applicants are required to complete specialist application forms as part of the insurance. When these forms are properly completed, together with underwriting and risk management surveys, insurers will analyse the risks and hazards that are relevant to the sub-Saharan African aquaculture enterprises. Insurers will adjust their underwriting approach accordingly.
Risk management surveys are regularly carried out by insurers everywhere. In the region and countries concerned, insurers use local aquaculture experts and/or experienced general insurance surveyors to inspect fish farm sites. In the case of large or sophisticated operations, insurers may bring in surveyors from outside with specialized experience.
Insurers will deal with claims in sub-Saharan Africa in exactly the same way that they deal with them in all other regions reviewed.
No information is available on the general underwriting experience, particularly the loss experience of aquaculture in the countries reviewed.
Any lack of appropriate transport, utility, veterinary or other infrastructures, or any shortfall in management and operational standards would impede the insurance of production operations in all regions. Africa suffers from unfavourable issues in various areas, each of which must be addressed by each producer when making an application for insurance to insurers.
The authors’ recommendations to the industry in sub-Saharan Africa are similar to those listed already under chapter 5.14 for Europe. These recommendations are the following:
to review lessons learned and establish an international programme for awareness-raising and capacity building to promote the use of aquaculture insurance;
to improve the collection and analysis of information on the aquaculture insurance market as part of a risk management strategy to sustain an increasingly global aquaculture industry.
|
[10] Please see Chapter 2,
section 2.2, footnote 2. |
