Aquaculture Insurance in Zambia: An Institutional Analysis of Risks, Challenges and Opportunities

Abstract

Aquaculture insurance is a viable tool for addressing risks associated with the aquaculture sector. This study investigates the institutional risks, barriers and opportunities related to aquaculture insurance in Zambia, guided by Institutional Theory, Market Failure Theory and Risk and Uncertainty Theory. Data were collected from 51 purposively selected insurance companies and banks using a semi-structured questionnaire designed to capture institutional, market and risk-related variables. The findings indicate that the aquaculture insurance market is still underdeveloped, with only 16% of surveyed institutions currently offering aquaculture insurance products. Among the eight institutions offering aquaculture insurance, pond location was the most frequently considered criterion (87.5%), while production cost, number and size of ponds, species and culture system were each considered by 62.5% of providers. Major challenges include difficulty in assessing aquaculture risks (84.3%), while notable opportunities lie in collaboration with other companies (100%), increased government support (88.2%) and improved extension services on aquaculture insurance (88.2%). There was no statistically significant association between years in operation and provision of aquaculture insurance (Fisher’s exact test, p = 0.2678), while institutions offering aquaculture insurance were significantly more familiar with the aquaculture industry than those not offering such products (Mann–Whitney U test, W = 7.5, p = 0.007). The study concludes that aquaculture insurance provision in Zambia is currently low but viable. From an institutional perspective, the findings highlight how regulatory structures, market inefficiencies and risk uncertainty shape insurance provision in the sector. We recommend developing aquaculture-tailored insurance products and improving risk assessment mechanisms through enhanced technical capacity building and stakeholder collaboration to foster a resilient and inclusive aquaculture insurance market. Further research is needed to examine the determinants and profitability of aquaculture insurance among fish farmers.