Welcome to Liga Asuransi, a special space that discusses risk management and insurance solutions in a comprehensive and applicable manner. In the midst of the dynamics of the business world and national development, the need for risk protection is becoming increasingly important — including in strategic sectors such as fisheries. Through this blog, we from L&G Insurance Broker want to share insights, analysis and insurance-based protection strategies to support large projects and small-scale businesses.
We believe that good risk management not only maintains business continuity, but also strengthens the resilience of the national economy in the Prabowo administration era and beyond.
General Description of the Prabowo Era Fisheries Development Program
President Prabowo Subianto’s government has designated the marine and fisheries sector as one of the main pillars in national economic development for the next five years. The big vision being promoted is to make Indonesia a strong, independent and sovereign maritime country, with a focus on optimal, productive and sustainable utilization of marine potential.
The fisheries development program launched includes increasing aquaculture production (aquaculture) at sea, coast and land, modernization of traditional fishing fleets and fishing gear, as well as revitalization of integrated fisheries centers in various coastal and island areas. Apart from that, the government is also encouraging the strengthening of the downstream fisheries industry, including processing, packaging and exporting seafood to global standards.
Not only from the production side, attention is also given to supporting small fishermen, community fish farmers, as well as cooperatives and MSMEs in the fisheries sector. Financial support, equipment and seed subsidies, as well as technical assistance are part of the strategy to improve the welfare of small-scale fisheries business actors.
On the other hand, the development of supporting infrastructure such as cold storage, fishing ports, feed factories and access roads to production centers is a priority to reduce logistics costs and encourage efficiency.
However, behind these great opportunities, fisheries projects also carry complex and varied risks — ranging from natural risks, technical failures, to financing and market risks. Therefore, an integrated approach between physical development, risk management and insurance protection is the main key in making the national fisheries agenda a success in the Prabowo era.
Risk Identification in the Fisheries Sector: Cultivation, Catching and Distribution
The fisheries sector is an industry that is very vulnerable to various types of risks, both natural, technical, operational and external. Environmental uncertainty and challenges in the production process make risk management an absolute necessity. In the context of the Prabowo government’s fisheries development program, understanding these types of risks is very important so that the projects implemented are not only economically successful, but also sustainable in the long term.
- Risks in the Aquaculture Sector
Cultivation of fish, shrimp, seaweed and other marine commodities is a large part of the target for increasing national production. However, this sector faces high risks such as:
- Mass diseases and outbreaks, which can cause massive fish deaths.
- Changes in water quality, due to pollution, seawater intrusion, or drought.
- Extreme weather and natural disasters, such as floods, storms and tsunamis.
- External interference, such as crop theft or environmental sabotage. Without a good control and mitigation system, these risks can cause large losses and stop business operations.
- Risks in Fishing
Fishermen operating at sea also face significant risks, including:
- Maritime accidents, caused by high waves, storms, or ship damage.
- Failure of fishing gear, including nets, radar and GPS navigation.
- Fishing zone conflicts, which can occur due to overlapping areas between local fishermen and large industries.
Illegal fishing by foreign vessels, which can reduce the catch of local fishermen.
- Risk on Distribution and Supply Chain
Distribution of fishery products, especially fresh or frozen, is also prone to risks:
- Cold chain failure during transportation.
- Logistics delays, which cause damaged products or loss of selling value.
- Fluctuations in market prices, both domestic and export, which affect profit margins.
With this kind of complexity, approaches to risk management in the fisheries sector must be designed from the project planning stage. One important component in this approach is the use of appropriate and structured insurance, so that losses due to unavoidable risks can be reduced significantly.
Types of Risk that Must Be Managed: Natural, Operational and Financial Risks
In carrying out fisheries projects, both small and large scale, proper risk management determines the success and sustainability of the business. These risks can generally be categorized into three main groups: natural risks, operational risks, and financial risks. All three are interrelated and can have a significant impact on project continuity if not managed well.
- Natural Risks
The fisheries sector is very dependent on natural conditions. Climate change, extreme weather, tropical storms, tidal floods and earthquakes are real threats that can cause damage to ponds, cultivation ponds, ships and cold storage infrastructure. In addition, disturbances such as rising sea temperatures or water pollution can disrupt the fish growth cycle and cause mass deaths.
- Operational Risk
Operational risk includes everything related to daily production activities. This includes technical failures in cultivation equipment, damage to cooling or processing machines, errors in feeding or water management, and work accidents that befall workers in the field. This risk can cause direct losses to productivity and output quality.
- Financial and Business Risks
Payment failure from business partners, volatility in export-import prices, delays in disbursement of project funds, and changes in licensing policies are quite serious financial risks. Projects can stall, suffer losses, or even go bankrupt if they don’t have anticipatory protection or strategies.
Each type of risk requires a different mitigation approach, and this is where insurance plays an important role as an effective and measurable risk management tool, which we will discuss in the next section.
The Role of Insurance as a Risk Mitigation Tool
Insurance is an important component in the risk management system that is often overlooked, especially in fisheries sector projects. In fact, in facing natural uncertainty, operational disruptions, and business risks, insurance is not only a financial protector, but also a strategic tool to maintain business continuity.
In the context of the fisheries project launched by the Prabowo government — which involves large investments and the participation of many parties — insurance plays several important roles:
- Guarantee Project Continuity
With insurance protection, losses due to natural disasters, fish disease, work accidents, or infrastructure damage will not disrupt overall operations. The project owner can continue business activities because he has replacement funds through insurance claims.
- Increase the confidence of investors and financial institutions
For projects that involve financing from third parties such as banks, multilateral institutions, or private investors, insurance protection is an important requirement. Insurance provides certainty that their assets and investments are safe from potential large losses.
- Assist in professional risk assessment
Insurance companies and brokers such as L&G Insurance Brokers provide risk assessment and risk engineering services. This helps project owners understand their risk profile in detail, so they can take preventative steps before losses occur.
- Supports Compliance with International Regulations and Standards
In fisheries export projects, meeting quality standards, food safety and product traceability often requires insurance coverage to protect the entire supply chain.
In other words, insurance is not just the “last protection”, but is actually the main foundation in building modern, resilient and sustainable fisheries projects.
Recommended Types of Insurance for the Fisheries Sector
Fisheries projects have complex characteristics and involve various parties — from the government, investors, fishermen, pond farmers, logistics players, to exporters. To ensure that all aspects of risk can be properly mitigated, choosing the right type of insurance is very important. The following are several insurance products recommended to support fisheries development projects during the Prabowo administration:
- Aquaculture Insurance (Aquaculture Insurance)
This insurance is specifically designed to protect fish, shrimp and seaweed farming activities from major risks such as:
- Mass deaths due to disease
- Changes in water quality
- Pest or predator attacks
- Extreme weather disturbances or natural disasters
This product is very relevant for modern pond projects or large-scale cultivation areas that are the focus of development.
- Property and Infrastructure Insurance (Property All Risks)
Protecting fixed assets used in fisheries projects such as:
- Pond and hatchery buildings
- Cold storage
- Fish feed and processing factory
Nursery equipment and aeration systems This insurance provides coverage against losses due to fire, earthquake, flood, theft and other physical risks.
- Sea and Land Transport Insurance (Marine Cargo & Inland Transit Insurance)
This product is important to ensure the safety of marine products during transportation, both domestic and export. Protect goods from damage, theft or loss during the distribution process.
- Construction Insurance (Contractors All Risks / CAR)
For fisheries infrastructure development projects such as ports, docks, warehouses and new pond facilities, CAR insurance protects against risks during the construction phase.
- Liability Insurance (Public Liability & Employer’s Liability)
Protects project owners or companies against claims from third parties due to property damage or physical injury. Employer’s liability provides protection against liability for employee work accidents.
- Credit and Default Insurance (Trade Credit Insurance)
For exporters and distributors of fishery products, this insurance helps reduce the risk of default from buyers or trading partners in local and international markets.
The right insurance not only protects against loss, but also provides a sense of security for all stakeholders. The combination of these products, with the support of mature risk analysis from experienced brokers such as L&G Insurance Brokers, will create a more resilient and sustainable fisheries ecosystem.
Strategic Recommendations from L&G Insurance Brokers
Through ambitious development policies, the Prabowo government is opening up great opportunities for the growth of the fisheries sector as a driving force for the national economy. However, the success of this program is highly dependent on the ability of all parties to manage the risks inherent in each stage of the project — from seeding to export distribution.
As an independent and experienced insurance broker, L&G Insurance Broker recommends that every fisheries project, whether government owned, state-owned, private or cooperative, integrates risk management and insurance protection from the early planning stages.
Here are some strategic steps that we recommend:
- Carry out a Risk Assessment from the Start
- Comprehensive risk mapping will help design appropriate and cost-effective protection strategies.
- Choose an insurance product that suits your risk profile
- Don’t buy policies in general — use a combination of products tailored to geographic conditions, type of business and operational scale.
- Engage a Professional Insurance Broker
L&G Insurance Broker is ready to be a partner who not only places risks to insurance companies, but also assists the claims process, provides education, and ensures optimal protection.
Build collaboration between government, industry and fishing communities
Subsidy-based insurance schemes, mutual cooperation or inclusive programs will be easier to implement with good assistance and socialization.
With the right approach, insurance is not only a solution when disaster strikes, but is a safeguard for the sustainability and success of Indonesian fisheries projects. Together with L&G, let’s create a fisheries sector that is strong, safe and ready to face global challenges.
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
—
