Breaking Down Hog Insurance Fraud Issues to Ensure Agricultural Subsidy Funds Truly Benefit Farmers

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◎Reporter Han Songhui

China is the world’s largest producer and consumer of pork, accounting for about half of global pork consumption. The pig industry, as an important foundation industry related to national livelihood, plays a crucial role in stimulating consumption and boosting the economy. As a risk diversification tool to stabilize the industry chain, pig insurance is an important institutional arrangement to improve the efficiency of fiscal funds in benefiting and supporting farmers, and it plays an irreplaceable role in the steady development of the pig industry.

Due to information asymmetry, dispersed insurance targets, and difficulties in underwriting and claims, precise insurance and claims for pig insurance have faced significant challenges. Fraudulent claims and insurance scams also occur from time to time in some regions. Such behaviors not only hinder the high-quality and sustainable development of pig insurance but also indirectly siphon off national fiscal subsidies, damaging the fairness and effectiveness of agricultural support policies.

To address this persistent problem, the State Administration for Market Regulation, the Ministry of Finance, and the Ministry of Agriculture and Rural Affairs recently jointly issued the “Notice on Strengthening Cooperation to Promote High-Quality Development of Pig Insurance.” On one hand, it clarifies the establishment of a reward-and-punishment mechanism, increasing penalties for illegal activities such as false underwriting, fraudulent claims, and misappropriation of fiscal subsidies. On the other hand, it promotes the online integration of “insurance and management” systems, gradually achieving full-process data sharing for breeding, harmless disposal, underwriting, and claims, strengthening cross-departmental data verification, and improving the accuracy of underwriting and claims.

This will help form a closed loop of “insurance—breeding—loss—handling—claims,” significantly increasing the cost of fraud. Zhao Le, Assistant General Manager of Anhua Agricultural Insurance, told Shanghai Securities News that the industry should establish a shared blacklist for fraudsters, cancel future insurance eligibility for “fraudulent policyholders,” and provide positive incentives such as convenient underwriting and claims processing and exemption from on-site verification for honest farms. Insurance companies should also shift from “passive claims” to “proactive governance,” using integrity mechanisms to guide and regulate breeding practices from the source to reduce risks.

Eliminating insurance fraud requires a multi-pronged approach addressing both symptoms and root causes. Long Ge, Deputy Director of the Center for Innovation and Risk Management at the University of International Business and Economics, told Shanghai Securities News that full-process data sharing for breeding, harmless disposal, and underwriting/claims is a key step in combating fraud. Cross-departmental data comparison and verification can technically plug information falsification loopholes. Meanwhile, regulatory oversight of insurance companies should be strengthened, using qualifications for agricultural insurance operations and selection as leverage to compel insurers to increase fraud detection efforts. Additionally, promoting exemplary cases of honest claims can help foster a market environment of lawfulness and trustworthiness.

Only by tightening the “protective net” of systems and building a robust “firewall” of supervision can the benefits of agricultural funds truly reach the people, and pig insurance return to its original mission of serving the industry and safeguarding livelihoods.