Factors Affecting Fishermen's Readiness to Pay for Protection and Indemnity Insurance in Kuala Kedah, Malaysia

Abstract

The fisheries industry plays a crucial role in food security and nutrition while also contributing significantly to Malaysia's economy. Despite the high risks of fishing in a dangerous environment, the adoption of Protection and Indemnity (P&I) insurance among fishermen is surprisingly low. This study examines the impact of insurance awareness, government intervention, risk perception, financial consideration and fishermen’s attitudes on the readiness to pay (RTP) of P&I insurance. Data were collected from 343 respondents using a convenience sampling technique and multiple regression analysis was conducted using SPSS version 27 to identify the effects of these factors. The findings revealed that government intervention, financial factors, risk perception and fishermen’s attitude had a significant positive impact on RTP for P&I insurance, while insurance awareness did not show a notable impact. The results demonstrated that government intervention proved to be the main factor (ß = 0.396) affecting RTP. Through financial support and subsidy programs, government initiatives play a crucial role in promoting P&I insurance, helping fishermen securing better financial stability and encouraging the adoption of insurance policies to mitigate environmental risks. This study provides valuable insight for government bodies and insurance policymakers in signifying suitable financial support and insurance schemes for fishermen to increase P&I insurance uptake to mitigate their risks at sea among fishermen in Malaysia. Future research could explore a broader geographical area, utilise mixed methods and also cross-tabulation analysis to deepen understanding of this issue and support sustainable environmental protection.