WILLINGNESS TO PARTICIPATE IN AN
INSURANCE SCHEME BY ARTISANAL
FISHERS IN GHANA
BY
Hayford G. Agbekpornu
Doris A. Yeboah
Samuel N.K. Quaatey
Rosina Williams
Richard Yeboah
Fuseina Issah
FISHERIES COMMISSION/MINISTRY OF FISHERIES AND AQUACULTURE
DEVELOPMENT-GHANA
IIFET CONFERENCE, 7-11 JULY, 2014
VENUE: BRISBANE-AUSTRALIA (QUT)
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1
Outline
Introduction
Methodology
Results
Conclusions
Policy recommendations
Introduction
•
Fisheries in Ghana contributes 1.4% of the GDP and 6.4% to Agric. GDP as
at 2013 (GSS, 2014).
•
The Fisheries sector provides employment for 10% of the population through
fishing enterprises, processing and ancillary businesses such as boat building,
input trade etc.
•
Artisanal fisheries contributes 64% of the total catch valued at
GH474,819,650.45 (2013)
•
13,000 artisanal marine canoes (140,000 fishermen) and about 27,000 canoes
(71,000 fishermen) for the Inland
VESSELS IN THE CAPTURE FISHERIES
Inland
canoes
Introduction cont’d
• Capture fisheries in marine and inland areas involve risks.
• These include : asset risks (loss or damage to fishing vessels,
equipment, gears) and Human risk.
• Insurance is an important tool in risk managing and fisheries
management
• Globally, fisheries insurance is available for Marine capture but
not for Inland capture fisheries (FAO, 2009).
• It is generally more difficult to obtain insurance for small scale
vessels than larger ones (FAO, 2009).
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Introduction cont’d
•
Disasters hit the fisheries sector (e.g. tsunami in 2004 and 2006, annual
hurricanes in the Caribbean, typhoons in Viet Nam and China in 2006),
•
Coverage of insurance is very low in Africa, South America, America and
Asia (FAO, 2009)
•
Fatality rates- USA: 25-30 times the national average, Italy, 21 times,
Australia, 143/100,000 compared with 8.1/100,000(FAO, 2000)
•
The number of global fatalities was estimated by the International Labour
Organization in 1999 to be 24, 000 deaths worldwide/year (ILO, 2000) and
heavily on dependents.
•
Ghana has had its fair share of the disaster (June, 2014-35 fishermen
died)
•
How are these accidents handled?
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Methodology
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• Questionnaire: semi-structures questionnaires for canoe owners and
crew (Slim Zekri et al., 2008) & focus group discussions,
• Regional Directors of Fisheries helped in identifying the study areas,
• Officers in the selected areas were trained to enumerate the
questionnaires,
• Questionnaires were pretested and reviewed,
• 80% of the data collection was at the major landing sites/beaches,
• Purposive (Chief fishermen), stratified (zones), random sampling,
Willingness to participate.
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Sampled questionnaires
Region
Canoe Owners
Crew
Expected
Actual
Expected
Actual
Greater Accra
90
90 (100%)
30
30 (100%)
Central
90
60 (67%)
30
30 (100%)
Western
90
61 (68%)
30
30 (100%)
Volta
90
89 (99%)
30
30 (100%)
Lake
90
86 (96%)
60
50 (83%)
Total
450
386 (86%)
180
170 (94%)
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Model specification
Results
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Demographics
Educational level
Gender
Freq
%
None
135
36.3
Freq
%
Primary
106
28.5
Male
364
94.3
JHS/Middle
100
26.9
Female
22
5.7
SHS
26
7.0
Total
386
100.0
Tertiary
5
1.3
Total
372
100.0
Residential status
Freq
%
Indigene
285
73.8
Migrant
101
26.2
Total
386
100.0
1/15/2015
Marital status
Freq
%
Married
362
95.5
Single
17
4.5
Total
379
100.0
13
Demographics Cont’d
Other sources of income
for fishermen (<31.0%)
Sources of income of
spouse (91.5%)
Other sources (fishermen)
Income source (Spouse)
Animal rearing/fish farming
Trading
Fishing smoking
Business
Herbalist/Traditional healing
Beautician
Crop Farming
Civil servants (Government worker)
Artisans
Hair dressing
Trading
Fish processing, mongering
Driving/transport owner
Farming
Business
Herbalist/ Traditional healing
Attitude/Safety @ Sea
Do canoes go in groups when
fishing (Owners)
Freq
%
Yes
74
20.0
No
296
80.0
Do crew inform their families
before going fishing
1/15/2015
Freq
%
Yes
377
97.9
No
8
2.1
15
Attitude/Safety @ Sea
Do you/crew listen to weather
forecast before going fishing
Freq
%
Yes
307
79.7
No
78
20.3
Do your crew wear
lifejacket/lifebelt when fishing
1/15/2015
Freq
%
Yes
26
6.8
No
357
93.2
16
Attitude/Safety @ Sea cont’d
Does your canoe carry a
communication gadget (e.g.
Mobile phone) to sea
Freq
%
Yes
369
96.3
No
14
3.7
Does your canoe carry compass
to sea when fishing
1/15/2015
Freq
%
Yes
26
6.8
No
357
93.2
17
Types of Asset
Asset
Freq
%
Car
6
1.6
House
225
58.3
Both
27
7.0
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Insurance
If yes, which one
(Multiple responses)
Are you involved in an
insurance scheme
Existing
Insurance
Freq
%
National Health
Insurance
Scheme
32
8.3
Motor vehicle
29
7.6
Freq
%
Life insurance
8
2.1
Yes
70
18.7
Property
1
0.3
No
304
81.3
Net
-
-
Total
374
100.00
Canoe
1
0.3
Outboard
-
-
Others
3
0.8
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Willingness to participate
in an insurance scheme
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20
Are you interested in taking up a Life/Accident
Insurance Scheme for crew (group)
Canoe Owners
Freq
%
Yes
259
69.4
No
114
30.6
Total
373
100.0
Whether Crew were
interested
1/15/2015
Freq
%
Yes
149
89.8
No
17
10.2
Total
166
100.0
21
Not interested in taking up a Life/Accident
Insurance Scheme for crew (group)
• Insurance companies are not reliable when it comes to payment
of claims (delay in or no payment of sum assured)
• Crew do not stay long with canoes or nets
• Limited funds to insure
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Are you interested in taking up a
personal Life Insurance Scheme
Canoe Owners’ responses
Freq
%
Yes
358
94.5
No
19
5.5
Total
377
100.0
Crew responses
1/15/2015
Freq
%
Yes
152
95.0
No
8
5.0
23
Not interested in taking up a personal
Life/Accident Insurance Scheme
• It is difficult to get claims from the insurers
• They would not benefit if nothing happens to them
• Limited funds to insure
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Are you interested in taking up a Life Insurance
Scheme for your family (wife and children)
Canoe owners
Freq
%
Yes
276
76.7
No
84
23.3
Total
360
100.0
Crew response
1/15/2015
Freq
%
Yes
111
77.6
No
32
22.4
Total
143
100.0
25
Not interested in taking up family Insurance
• Delay in payment of insurance claims
• Have more than a wife and many children
• Insure children and not wife
• My family do not go fishing
• My children are young
• My children are old
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Responses of canoe owners
Are you interested in taking up an
insurance for your outboard
motor
Freq
%
Yes
283
79.1
No
75
Total
358
Are you interested in taking up an
insurance for your fishing net
Freq
%
Yes
302
82.3
20.9
No
65
17.7
100.0
Total
367
100.0
Are you interested in taking up an
insurance for your canoe
Canoe Owners
Freq
%
Yes
325
88.8
No
41
11.2
Total
366
100.0
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Not interested in taking up insurance policy for
fishing gears
• Delay in claims
• Accidents rarely occur
• It is additional cost
• Nets do not last long to be insured
• Not interested
• Canoes can be repaired
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Are you interested in taking up a pension
scheme for yourself
Canoe Owners
Freq
%
Yes
314
84.0
No
60
16.0
Total
386
100.0
Crew
1/15/2015
Freq
%
Yes
148
93.7
No
10
6.3
Total
158
100.0
30
Not interested in taking up a pension scheme
• Delay in claims
• Fishermen do not retire
• Children will take care of the aged
• Not interested
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Risk and emergency
managing strategy
Freq.
%
Rank
Boat mommies
93
24.7
1
Bank
82
21.8
2
Savings/self
82
21.8
3
Family
60
15.9
4
Money Lenders
46
12.2
5
Friends
39
10.3
6
Fish
mongers/processors
22
5.8
7
Micro-fiance group
21
5.6
8
Credit union
6
1.3
9
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Disaster encountered during
fishing for the last 5 years
•
Storm
129
•
Excess rain
58
•
Others
– Collision
– Damage of net
– Damage of canoe
– Loss of net
– Loss of outboard motor
– Loss of canoe
– Burning of boat (electrical fault)
36
142
112
268
48
12
1
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Logistics result
Socio-economic
characteristics
Canoe
characteristics
WTP
Coef.
Std. Err.
Z
P>z
(Marg.
Effect)
Age
Education
family size
Number of dependent
Experience (Years of fishing)
Residential status
Involved in insurance
0.008
-0.336
-0.165
-0.116
-0.060
0.252
-1.783
0.022
0.420
0.063
0.041
0.022
0.422
0.575
0.35
-0.80
-2.60
-2.85
-2.70
0.60
-3.10
0.728
0.423
0.009***
0.004***
0.007***
0.550
0.002***
0.001
-0.065
-0.032
-0.023
-0.012
0.051
-0.400
0.90
0.33
-0.75
1.17
-1.57
0.02
-2.74
1.31
1.94
-1.53
0.58
0.367
0.741
0.453
0.453
0.116
0.984
0.006***
0.191
0.053**
0.127
0.564
0.007
0.001
-0.001
0.008
-0.135
0.005
-0.230
0.178
0.215
-0.118
-
Engine age
Horse power
Duration
Number of crew
Attitude
Canoe group
Inform family
Weather
Life jacket
Assets
Own a Car
Own a House
Constant
Log likelihood = -101.56794
LR chi2(18) = 82.17
Pseudo R2 = 0.2880
0.037
0.041
0.006
0.019
-0.007
0.010
0.038
0.033
-0.642
0.409
0.026
1.273
-1.503
0.549
1.151
0.880
1.514
0.781
-0.629
0.412
0.869
1.507
Number of obs. = 222
Prob. > chi2 = 0.000
Conclusions
• A few of the canoe owners are involved in various insurance
schemes
• Most of the canoe owners/crew are willing to participate in:
– Group insurance of crew
– Personal insurance
– Family insurance
– Gears insurance (Outboard motor, Net, Canoe)
– Pension schemes
• Most are willing to pay a premium
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Conclusions Cont’d
• Most canoe owners depend on external sources as risk and
emergency management strategy and are indebted to such sources.
• Canoe owners have encountered some form of disaster on the water
bodies (Sea & Lakes) since they started fishing.
• Family size, number of dependents, fishing experience, involvement
in insurance scheme, weather forecast, and ownership of car
significantly influence Willingness-To-Pay.
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Policy Recommendations
• There should be stakeholder consultation on the scheme.
• There should be intensive awareness creation of life insurance
schemes through the print, electronic media, workshops,
conferences among others.
• Insurance companies are to target the illiterate fishermen and their
families in insurance awareness creation.
• The telecommunication network should widen the coverage area of
the use of their services on the sea.
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Policy Recommendations
• There should be dialogue with the telecommunication industries to
develop life/accident insurance package for the sector.
• Insurance companies should undertake risk management.
• Insurance scheme should be piloted before expanded to minimize
errors in implementation,
• Laws, policy and/or regulation should be put in place to protect the
fishermen against unscrupulous insurance companies,
• To protect the insurance industry, standards should be set for the
insurance of the fishing gears,
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Thanks for your attention
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