Micro Insurance for Fishermen: Addressing Risk Perception and Participation Challenges

Abstract

Fishermen are a community group that is very vulnerable to economic and occupational safety risks, with high levels of poverty and work accidents. Although micro insurance can be an affordable financial protection solution, participation in this product among fishermen remains relatively low. This study aims to analyze the effect of financial literacy, saving motives, and risk perceptions on fishermen's interest in using micro insurance. This study was conducted among 165 fishermen in the North Jakarta area, employing a quantitative approach and the Structural Equation Modeling–Partial Least Squares (SEM–PLS) method. The results showed that financial literacy and saving motives did not have a significant effect on fishermen's interest in using micro insurance. On the contrary, risk perception had a positive and significant effect. This finding indicates that fishermen's decisions to insure are more influenced by their perceptions of the risks faced than by financial understanding factors or saving motivations. The implications of these results emphasize the importance of increasing awareness of work risks through experience-based education and risk mitigation as a strategy to increase fishermen's participation in micro insurance programs.