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In the era of President Prabowo’s leadership, the fisheries sector has become one of the mainstays for creating food security, increasing exports, and opening new jobs. However, to achieve these ambitious targets, fisheries projects – from cultivation to distribution – must be prepared to face various risks that can disrupt sustainability and productivity.
This article will review the main types of risks that threaten government fisheries projects, and how insurance can be an effective solution in anticipating and managing these risks early on.
Share this article with your colleagues and explore hundreds of other informative articles on this blog to broaden your knowledge about risk management and insurance across various industry sectors.
Risk Mapping in the Indonesian Fisheries Industry
Fishing industryin Indonesia has unique and complex characteristics. As the largest archipelagic country in the world with extraordinary marine potential, Indonesia faces its own challenges in maintaining the productivity and sustainability of the fisheries sector, especially when large projects are being pushed by the Prabowo government.
For these projects to be successful, a very important first step is thorough risk mapping. This aims to identify potential disturbances, assess their impacts, and determine appropriate mitigation strategies. Risks in the fisheries sector can be classified into several main categories:
Environmental and Climate Risks:
- Changes in sea water temperature
- Extreme weather such as storms, heavy rain and tidal floods
- Water pollution from industrial and agricultural waste
- Risk of earthquakes and tsunamis in coastal areas
This risk can disrupt the cultivation ecosystem, hinder fishing activities, and damage supporting infrastructure such as ports and ponds.
Biological and Production Risks:
Fish disease attacks such as WSSV, Vibriosis, or parasites
- Failure of seeding or harvest cycle
- Ecosystem imbalance in ponds or pools
- Feed contamination and decreased water quality
Biological risks are particularly damaging because they can cause massive losses in a short time, and are difficult to recover from without rapid intervention.
Operational Risk
- Damage to production or processing equipment
- Cold storage system failure
- Logistics and distribution disruptions
- Human error
Unprotected operations will disrupt daily productivity, causing wasted costs and time.
Financial and Market Risks
- Export price fluctuations
- Default by trading partner
- Delays in payments for government projects
- Unexpected costs due to project delays
Without proper financial and insurance strategies, these risks can strain cash flow and make projects unsustainable.
With comprehensive risk mapping, project actors can design appropriate control systems — one of which is through insurance protection. In the next section, we will discuss more about Climate and Natural Disaster Risks in Aquaculture and Fishing.
Climate and Natural Disaster Risks in Aquaculture and Fishing
One of the biggest challenges in Indonesia’s fisheries industry is its high dependence on climate and natural conditions. Global climate change in recent years has increased the frequency and intensity of natural disasters that directly affect fish farming and fishing activities.
- Risks in Fisheries Cultivation
Fish farmers and cultivators rely heavily on stable temperatures, water quality, oxygen levels, and salinity levels. When climate anomalies occur — such as El Nino or La Nina — these conditions can change drastically:
- Water temperatures that are too high or too low can disrupt fish metabolism, slow growth, and even cause mass mortality.
- Extreme rainfall can cause pond flooding, damage infrastructure, and contaminate aquaculture ponds.
- High waves or coastal abrasion can damage ponds and cause major losses.
- Risks in Fishing
- Traditional fishermen and large-scale fishing vessels face risks:
- A sea storm that threatens the safety of the ship and crew
- High waves shorten sea time
- Changes in sea water currents and temperatures that shift the location of fish populations
Losses due to natural disasters are often not only physical, but also have an impact on income and operational continuity.
Solution Using Insurance
To overcome this, fisheries business actors need to consider protection through Aquaculture Insurance/Aquaculture Insurance, Property Insurance, And Marine Freight Insurance. With insurance, the financial impact of disasters can be reduced, and business continuity can be maintained even in extreme conditions.
Risk of Disease and Production Failure
One of the most devastating risks in the aquaculture sector is disease outbreaks and production cycle failures. These risks often come suddenly and can wipe out entire populations in a short time, causing billions of rupiah in losses, especially in large-scale aquaculture projects that are part of government programs.
- Fish and Shrimp Diseases
Diseases such as White Spot Syndrome Virus (WSSV), Infectious Myonecrosis Virus (IMNV), Vibriosis, and Columnaris are major threats in fish and shrimp farming. These outbreaks:
- Fast spreading
- Difficult to control
- Often causes mass death
The main causes can come from water pollution, feed quality, pond sanitation, or extreme weather that triggers stress in fish and weakens their immune system.
- Production Cycle Failure
- Crop failure can also be caused by:
- Failure of the hatchery process
- Environmental imbalance (temperature, salinity, pH)
- Poor feed quality
- Human error in cultivation management
Production failures can cause distribution delays, loss of purchase contracts, and pressure on business liquidity.
Solution Using Insurance
Aquaculture Insuranceis an ideal solution to protect farmers from losses due to fish mortality, disease, and other environmental factors that disrupt production. With measurable premiums, business actors can get financial guarantees to restart the production cycle, without having to go bankrupt.
This insurance is now available for various aquaculture commodities, such as vaname shrimp, tilapia, catfish, milkfish, and even seaweed — according to the specific needs and risks of each business.
Licensing, Logistics and Distribution Risks
In supporting the national-scale fisheries project run by the Prabowo government, regulatory, logistics, and distribution aspects play a key role in the success of operations and supply chains. However, in the field, these three aspects often become a source of quite serious risks if not managed properly.
- Licensing and Regulatory Risks
One of the obstacles often faced is delays or difficulties in obtaining:
- Environmental permits and pond location permits
- Export certification (HACCP, SNI, etc.)
- Distribution permit and quarantine documents
- Funding approval from financial institutions due to lack of risk protection
When licensing is stalled, the entire production and distribution process can be delayed, or even canceled. This risks commercial losses and loss of contracts.
- Logistics Risk
The fisheries sector is highly dependent on a reliable logistics system, especially for perishable goods. Key risks include:
- Cold chain failure
- Damage or loss of goods during shipping
- Distribution delays due to weather or poor road infrastructure
- Distribution and Market Risk
Fishery products must reach the market quickly. Otherwise, the quality decreases, the selling value decreases, or they cannot even be sold. This is made worse if there are:
- Market price fluctuations
- Unstable demand
- Fierce global competition
Solution Through Insurance
Recommended solutions include:
- Marine Cargo Insuranceto ensure the safety of goods during delivery.
- Product Liability Insuranceto protect if the product gives rise to claims from consumers.
- Trade Credit Insurance in case of default by the buyer.
With the right protection, business actors can continue to run their businesses efficiently and safely, even amid systemic challenges.
Types of Insurance Relevant for Fisheries Projects
Each stage of a fisheries project — from seeding, cultivation, harvesting, processing, to distribution — has a unique risk profile. Therefore, a comprehensive and integrated insurance approach is needed so that all potential losses can be managed effectively. The following are the types of insurance that are most relevant to support both government and private fisheries projects:
This insurance is specifically designed for fish, shrimp and other marine commodity cultivation businesses. Provides protection against:
- Mass death due to disease
- Environmental disturbances such as changes in temperature, oxygen levels, or water quality
- Losses due to natural disasters such as floods and storms
Aquaculture Insurance is very important for farmers and large-scale cultivators who are the targets of the government’s priority programs.
Used to protect physical assets of a project such as:
- Ponds, hatcheries, processing plants and cold storage
- Production machines, generators, aeration systems
- Offices, warehouses and other facilities
PAR covers the risks of fire, theft, flood, earthquake and other physical damage.
Required to ensure the safety of fishery products during transportation — both domestic and export. Bearing the risk:
- Damage due to bad weather
- Loss due to theft
- Damage due to mishandling
Highly relevant for government-funded fishing port, cold storage, or aquaculture infrastructure development projects. Provides protection during the construction process against physical damage, work accidents, and force majeure.
Provides protection in the event of a lawsuit due to defective products or accidents to third parties. Suitable for processing plants and exporters of processed seafood products.
Covers financial losses due to operational disruptions that cause business activity to stop — for example due to machine breakdown, natural disasters, or fire.
- Trade Credit Insurance
Providing guarantees against the risk of default by business partners or buyers, both domestically and abroad.
By choosing the right combination of insurance, project actors can manage risks intelligently and maintain business stability, even amid uncertainty.
Recommendations for Implementation and Risk Monitoring by Insurance Brokers
Effective risk management does not stop at purchasing an insurance policy. Rather, the most important part is how those risks are identified, monitored and managed on an ongoing basis. This is where the role of a professional insurance broker such as L&G Insurance Broker becomes very important in assisting fisheries projects from inception to full operation.
Our recommended implementation steps:
- Risk Profiling and Risk Mapping from the Start
Each project has unique characteristics. The L&G team will create a complete risk map based on location, type of business (farming, capture, distribution), and financing structure.
- Integrated Insurance Program Design
We do not just offer one type of policy, but build an integrated insurance program that covers all stages of the project with efficient premiums and optimal protection.
- Risk Placement to the Right Insurance Company
L&G works with many leading national and international insurance companies, ensuring that risks are placed according to the capacity and specialization of each insurer.
- Periodic Monitoring and Evaluation
We conduct regular reviews of policies and client needs, especially when there are changes in project scope, asset value, or operational location.
- Active Claims Assistance
If a risk occurs, our team will accompany the claims process from start to finish, including document collection, negotiation, and expediting claims payments.
With a holistic and proactive approach,L&G Insurance Brokercommitted to helping fisheries projects — whether government, state-owned, or private — become more resilient, sustainable, and fully protected from threatening risks.
Looking for insurance products? Don’t waste your time and contact us now
HOTLINE L&G 24 JAM: 0811-8507-773 (CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: oktoyar.meli@lngrisk.co.id
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