Raising fish for American dinner tables can be a lucrative business- unless the crop dies off.

The risk of mass death is so high in fish farming, as it is called, that bankers are unwilling to make loans to farmers unless they have insurance policies on the lives of this slippery crop.

That's where Peoples Heritage Group of Portland, Maine, comes in. The $10 billion-asset bank company, through its insurance agency, Morse, Payson & Noyes, is selling a package of property and casualty and fish mortality insurance to fish farmers nationwide.

Though most banks offer only a limited range of retail and commercial insurance products, Peoples Heritage is working to prove that banks can make it as purveyors of premium-priced insurance for niche markets.

"We go where complexity is, where insurance isn't seen as a commodity," said John R. Curran, president of Morse, Payson & Noyes. "This isn't like insuring the corner bookstore."

The agency's program, which started in earnest two years ago, is run by Gregory M. Gutchigian, director of aquaculture services, from a Princeton Junction, N.J., office.

Mr. Gutchigian said the agency has sold insurance to fish farmers in 17 states and will have premium sales of about $1.25 million this year. Mr. Gutchigian looks for $5 million in annual premiums in a few more years but said he thinks sales will surpass that as the U.S. aquaculture industry develops.

According to the U.S. Department of Agriculture, fish farming is a major growth industry. The value of fish raised in captivity went from $585.5 million in 1990 to $793.7 million in 1996, the latest year for which figures are available.

Though lining up an insurer to underwrite property and casualty insurance on fish farm equipment wasn't overly difficult-The Hartford provides the products that Morse, Payson sells-finding a carrier for fish mortality insurance was more challenging.

Mr. Gutchigian ultimately signed Underwriters Insurance Co. of Lincoln, Neb., as the primary insurer, but he had to go to the United Kingdom to line up a reinsurer willing to take up to 70% of the risk.

That company, Lloyd's of London, with more than 25 years of experience underwriting European aquaculture operations, had enough knowledge to undertake the insurance risk in the United States, Mr. Gutchigian said.

The business of fish farming is a mystery to many insurers.

Some farms along coastal areas use simple pens to raise fish such as salmon. But with a high density of fish, disease can spread quickly, and the concentration of fish waste can disrupt environmental balance.

Other aquaculture businesses raise fish in indoor tanks and often recirculate water. Though backup systems are often used, mechanical breakdowns can defeat cleansing, aerating, or heating of water-leading to quick death of fish.

But Morse, Payson & Noyes has embraced the challenges of difficult insurance before, Mr. Curran said.

It has become an expert at selling insurance to such businesses as propane dealers, oil dealers, and groups of doctors, he said.

Insurance difficulties have held up aquaculture growth, Mr. Gutchigian said.

"Bankers haven't known about the availability of stock insurance, and there are people who are screaming for money," he said. Many start-up companies have to mortgage the house, and then they start out undercapitalized, he said.

When Aquafuture Inc., a Turners Falls, Mass., company that raises striped bass indoors, sought bank financing recently, it went looking for insurance to replace an older policy. The old policy had huge deductibles, which meant it covered only complete catastrophe, said Thomas Humphrey, the company's chief financial officer.

Mr. Humphrey's search for insurance led to just two agents-Morse, Payson & Noyes and a Canadian broker. "At least it was a choice," he said.

For a cost similar to that of its old policy, Aquafuture chose a policy from Morse, Payson that will protect revenues from potential mortality losses, he said. This let Aquafuture obtain a loan from its longtime lender, Greenfield Savings Bank, Mr. Humphrey said.

But banks are slow to lend to aquaculture programs, often because growers do not know mortality insurance even exists, said William J. Borsa, vice president of Central Maryland Farm Credit, a lending institution with $265 million of assets.

Mr. Borsa has written six loans to aquaculture programs in the last two years. He said that though character issues and cash flow are important, insuring collateral is an important consideration in loans. But the insurance is not inexpensive, he said.

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