The ongoing boating accidents are deepening the concerns of the National Federation of Fisheries Cooperatives. The number of accidents among fishermen is increasing, and the fishing vessel crew and fishing boat disaster compensation insurance has been in the red for five consecutive years. The National Federation of Fisheries Cooperatives has taken steps to reduce accidents among fishermen and find ways to secure the financial stability of the fishing vessel crew and fishing boat disaster compensation insurance.
According to the government on the 27th, the National Federation of Fisheries Cooperatives has commissioned research on ways to establish sustainable fisheries insurance this month. The National Federation of Fisheries Cooperatives noted, "The fishing vessel crew and fishing boat disaster compensation insurance business is continuously experiencing losses, so stabilizing the loss ratio is necessary," and stated the reason for commissioning the research by comparing the current status of similar insurance and reviewing improvement plans to find ways to secure financial stability.
Fishing vessel crew and fishing boat disaster compensation insurance is a government policy insurance implemented in 2004. The fishing vessel crew disaster compensation insurance is a product that compensates when a fishing vessel crew member suffers an injury, illness, physical disability, or death related to fishing activities. It can be seen as "work-related accident insurance" for fishing vessel crew members. The fishing boat disaster compensation insurance compensates for damages incurred in accidents such as sinking, stranding, collisions, fire, and structural damage at sea.
The problem is that the financial health of the National Federation of Fisheries Cooperatives' fishing vessel crew and fishing boat disaster compensation insurance has been impacted by the ongoing marine accidents and the aging of fishing vessels. According to the Ministry of Oceans and Fisheries' marine safety action plan, major marine accidents increased from 167 cases in 2020 to over 700 cases last year, more than quadrupling. During the same period, casualties also increased from 92 to 165.
The National Federation of Fisheries Cooperatives analyzed that, "Not all accidents are compensated," but noted, "With the recent increase in fishing vessel-related accidents and the aging of fishing vessels, the increasing breakdowns have affected the loss ratio (the ratio of total insurance paid to premiums received)."
Typically, in the insurance industry, a loss ratio exceeding 82% is viewed as a loss. The loss ratio for fishermen's insurance in the last five years (2020-2024) has recorded 90.3%→80.4%→76.6%→90%→87.4%. Last year, the loss ratio for fishing vessel insurance also approached 80%.
As a result, cumulative losses have been accumulating year after year. For the fishing vessel crew disaster compensation insurance, losses have continued at 13.8 billion won in 2020, 14.7 billion won in 2021, 6.4 billion won in 2022, 3.9 billion won in 2023, and 4.7 billion won in 2024. The fishing boat disaster compensation insurance posted losses of approximately 5 billion won annually for three years starting in 2020, but turned to profit in 2023, only to return to loss last year (-100 million won).
An official from the National Federation of Fisheries Cooperatives explained, "Although losses have been persistent recently, that has not been the case since the beginning of the implementation," adding, "Operating profit varies based on factors such as the scale and frequency of accidents, reinsurance revenue or expenses, and the degree of administrative expense execution."
Moreover, this year, the target of the disaster compensation insurance for fishermen has increased to fishing vessels under 3 tons (40,177 vessels, 62% of the total), and the number of accidents that the National Federation of Fisheries Cooperatives will need to cover is expected to rise further. According to the National Federation of Fisheries Cooperatives, last year's subscription rate for fishing vessel crew disaster compensation insurance was only 57.5% based on crew numbers and 32.3% based on the number of vessels, but a significant increase is expected this year. There is a fine of 1 million won for those who are subject to mandatory participation but do not subscribe to the fishing vessel crew disaster compensation insurance.
An official from the National Federation of Fisheries Cooperatives stated, "As the number of eligible participants increases this year, the absolute number of accidents is expected to rise," adding, "As insurance premium revenue will also increase, it remains to be seen whether it will significantly affect the loss ratio in the medium to long term."
The National Federation of Fisheries Cooperatives plans to analyze the current status of the disaster compensation insurance for fishermen and fishing vessels through the research project, as well as identify system improvement measures and promote financial soundness. The funding sources for the payment of fishing vessel crew and fishing boat disaster compensation insurance consist of national treasury, local funds, and paid insurance premiums, so an increase in losses will also impact government accounting.
An official from the National Federation of Fisheries Cooperatives noted, "While reducing losses is important, what's more important is to reduce the injuries and fatalities among fishermen," and said, "We will continue to conduct the research project to find measures related to financial soundness while expanding safety education and continuing campaigns to reduce accidents."