China’s First Insurance Policy for Abalone Industry

At the morning of November 25, 2021, China’s first all-risk insurance for abalone breeding industry to against typhoon disaster and price change had been initiated in Huilai county, Jieyang. This is a policy-based approach to ensure agriculture industry chain leader mechanism, and another action of rural revitalization contributed by Chinese insurance industry.

Abalone breeding is one of the pillar agriculture industry in Huilai, and one of ten municipal-level industrial chain. Due to the advanced seeding technique, the annual output of abalone seeds reached 4 billion tails, account for 50% of domestic market, annual revenue hit 1.5 billion yuan. But natural disaster and fluctuation of abalone seed price are the major issues troubling many breeding farmers.

Now, this green, fingernail-size abalone seeds are receiving special cares and favors from insurance industry. “I have cultivated 500 ponds and more than 20 million abalone seeds, I decide to pay for three insurance policies. With the guarantee of insurance, I have confident for my abalone production”, said by Chen Huasheng, general manager of Huilai Huasheng Aquaculture Co., Ltd.

At the same day, 60 insurance policies were sold to breeding farmers, each policy corresponds to 125 breeding ponds. A total of 7,500 breeding ponds received guarantee, it means when either natural disaster causing the deaths of abalone seeds or price fluctuation causing financial losses, the claim is triggered and pay for one million yuan for each insurance policy.

This all-risk insurance will follow “government guidance, market operation, voluntary purchase, pilot implementation” principles. The local government will use fiscal subsidy to support abalone farmers to buy insurance and transfer the risk of abalone breeding to the insurance company. Each insurance policy costs 100,000 yuan, the farmers who buy the insurance only need to pay 30% of the total, the rest 70% will be supplied by the government in all levels. It is a critical action to enhance the risk resistance of abalone industry and promote the sustainable development of the industry, said by the person in charge of PICC Huilai Branch.

Since last year, Jieyang had pushed forward the implementation of industrial chain leader mechanism in agriculture industrial chain, to promote the modernization of agriculture by the assistance of whole industrial chain. In total, the city government had established ten municipal-level industrial chains, including abalone breeding. This year, 59 key construction projects had been started, with planned investment of 2.444 billion yuan, and already invested 0.575 billion yuan.

On November 25, 2021, PICC Huilai Branch and Agriculture and Rural Affair Bureau of Huilai County conducted the launch ceremony of Abalone Index Insurance. PICC Huilai Branch also signed the cooperative agreement of Abalone Breeding Industry Insurance with Huilai Abalone Industry Association, to push forward the comprehensive production and high quality development for Huilai’s abalone industry chain.