An assessment of insurance needs and opportunities in the Maltese commercial fishing sector

Abstract

The purpose of this study is to get a clear understanding of the risk culture within the Maltese commercial fishing sector and of the fishermen’s perception and take-up of insurance. The insurance market is analysed from the perspective of fishermen and the impacts of moral hazard and adverse selection are investigated. Finally, the study finds possible solutions to help fishermen with the mitigation of risks. This study was conducted by the qualitative analyses of interviews carried out with a sample of the Maltese fishermen. Qualitative analysis was deemed appropriate for this research since little literature was available and therefore an in-depth understanding was needed. Interviews were analysed thematically to uncover the main themes. The Maltese Fishermen are characterised as being mostly risk-takers with minimal insurance take-up with regards to their vessels since they feel that they are in control of the risk. Foreign crew on the vessels are considered an added risk since they are out of the fisherman’s control so personal accident cover is sought after. The insurance market with respect to insurance for their fishing vessels is not efficient as a result of the large presence of moral hazard and adverse selection. Only the fishermen’s perspective is analysed in depth with regards to the risks they face with no input about the insurer’s opinion of fishing risk. The sample size may not be representative of the entire Maltese fishing community. Parties transacting business with the fishing community can gain a better understanding into the thought process behind their view of risk. Anyone interested in fishing as an occupation can get an idea of the risk involved to be able to make an informed decision. This study fills in the gap present in the literature about risk management in the fishing sector.