Chile, Photo: friosur.

Chileans face insurance tsunami

The mass mortalities experienced by many Chilean salmon farming companies in February and March are likely to lead to huge increases in insurance premiums for the country’s salmon farming sector, according to international insurance firms.

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Speaking to the Financial Times this week Dagfinn Ulriksen, head of aquaculture at Aon Norway, said that premiums are expected to rise 50 to 60 per cent.

The hike in insurance is due to 25 million fish being killed by the algal blooms over the Chilean summer. According to the London-based paper, around $100 million-worth of these fish were insured – the highest figure on record – although uninsured losses could reach another $100 million.

Indeed, although many companies, such as Marine Harvest Chile, had sufficient insurance to cover the worst of the losses, most policies did not cover the full impact of the blooms.

Blumar, for example, posted losses of $5 million, despite being insured.

Meanwhile Aquachile, the country’s largest salmon producer, had no insurance against algal blooms and has since reported losses of $43.5 million – from a combination of mortalities, being forced to harvest fish early at some sites and the cost of transporting fish to areas that were less affected by the blooms.

Australis, the country’s 8th highest producer, which was also not insured against such an event, posted losses of $7.8 million.

The fear now is that – due to the wide-range of problems encountered by the Chilean industry of late – it is not only likely that premiums will increase, but it is also possible that some insurers could abandon the Chilean aquaculture industry entirely.