China's insurance authorities have authorized five domestic
insurers to undertake pilot sow coverage for pig breeders to rein
rising pork prices.
They are the People's Insurance Company of China, China United
Property Insurance Company, Shanghai Anxin Insurance Company, Anhua
Agricultural Insurance Company and Sunlight Mutual Insurance
Company.
Sources with the five insurers said they were developing the new
service, without revealing details. But the China Insurance
Regulatory Commission (CIRC) has required the service to be
available to pig breeders no later than Aug. 15.
Under CIRC guidelines, the services should start first with 118
counties registering a sale volume of more than 1 million live pigs
a year and then extend to 374 countries where annual sales are up
to 600,000 live pigs.
Calling the sow insurance "an opportunity" for domestic insurers
to tap into the rural market, which is less insurance-aware, Dong
Bo, deputy director of Property Insurance Regulatory Department of
the CIRC, urged the five insurers to develop products that were
"easy to understand and able to cater to the needs of farmers".
He said the insurance should cover losses from blue-ear disease
and natural disasters such as floods, fires, typhoons and other
epidemics.
In attempt to make an accurate evaluation of the pilot insurance
program, the CIRC has required the five insurers to adopt unified
rates and manage the program in a separate account.
The CIRC has priced the premium at 60 yuan per sow, promising a
subsidy of 30 yuan from the central government and 18 yuan from
local government. Pig breeders will only need to pay the remaining
12 yuan.
To prevent subsidy fraud, Dong said a special
identify-discerning system must be put into place to ensure
insurers and local governments had a good grasp of the number of
sows in stock.
After the wholesale pork price jumped 74.6 percent in June from
the same period last year due to short supply triggered feedstuff
price hikes and outbreaks of the blue-ear pig disease, the
government was pressed to facilitate pig restocking.
The highly pathogenic blue-ear disease, also known as porcine
reproductive and respiratory disease, often leads to miscarriages
and dead fetuses, discouraging pig breeders from raising sows.
(Xinhua News Agency August 4, 2007)