Jonathan Barratt

Index insurance solutions offer sustainable risk management to terrestrial farmers in many regions looking to hedge lost income caused by adverse weather events. However, these solutions are not widely available to marine industries, such as aquaculture. In August-September 2019, a marine heatwave (MHW) caused a record fish mortality event at Atlantic salmon farm sites off the southern coast of Newfoundland, Canada. The heatwave killed 2.6 million fish, effectively destroying half of the farms’ stock and income. We analyse this event to see if an index insurance solution can be designed to insure aquaculture enterprises against these extreme marine events.  The sustainability of aquaculture industries in a warming climate has been questioned, particularly in fast-warming regions. One warming hotspot is in Tasmania, Australia, where salmon aquaculture exists. A similar event to the Newfoundland salmon die-off could be catastrophic for the industry and its value chain. MHW events have the potential to affect aquaculture sustainability in many regions. Here, we apply a novel terrestrial parametric insurance methodology to salmon aquaculture to assess whether this risk management approach can enhance industry sustainability or facilitate a transition to greater resilience. We (i) analyse the salmon mortality event in Newfoundland to estimate the impact a MHW would have on income and (ii) demonstrate a parametric index-based insurance structure based on sea surface temperatures (SST) and MHW intensity. We show that an index insurance structure similar to that used for agriculture can help safeguard income and contribute to the financial sustainability of climate-vulnerable businesses and communities involved in aquaculture.

Biography:

Jonathan Barratt
B.Ec (Hon), M.Ec, GDip CorpLaw, SA Fin (Fellow), ANZIIF(Snr Assoc,) CIP.

Jonathan Barratt has just finished is PHD in Climate Sciences with a focus on creating a scientific footprint on the usefulness of Parametric Insurance in Agriculture. He has been involved in the alternative risk transfer market for the last 40 years having obtained experience in the Swiss, Australian, London, Chinese and Hong Kong markets.

He has a proficient knowledge in all aspects of the insurance/derivative markets. He is regarded as a “go to person” on any discussion on risk transfer in the wholesale markets, with a primary focus on climate resilience for businesses in the commodity, energy, and foreign exchange markets.

Respect in the market has been gained to the extent that he is a regular commentator and guest strategist on OZ Business, CNBC Asia, Reuters, Bloomberg TV, NDTV India, TV 18 India, and UT TV India.

He holds various board positions who draw on his extensive experience in all facets of the regulated insurance and OTC derivatives markets.