The Group Insurance Division is responsible, while respecting the management independence of the regulated infrastructure operators, for preparing the insurance policy of the EDF group and organising its implementation throughout the Group, in order to continuously optimise the overall costs of its insurable risks(1).
Its duties are to:
The Insurance Managers of entities and controlled subsidiaries that join the Group’s programmes are responsible for:
This work, carried out in close collaboration with the Group Insurance Division, makes it possible to continuously improve the quality of information on insurable risks as programmes are renewed and prevention visits are carried out (assessment of maximum possible claims, “SMP”). In connection with prevention actions, the Insurance Division establishes and oversees implementation of the site inspections programmes.
Framatome’s inclusion into the Group’s insurance programmes continues with a view to improving the coverage offered and achieving financial synergies. This integration concerns in particular General Liability and Civil Liability insurance for Corporate Officers, Damage insurance (excluding nuclear property), and Cyber risk insurance. Integration into the Nuclear Operator’s Civil Liability and associated transport group programme will take effect at the next renewal of the contract on 18 February 2020.
Purpose: the Insurance policy, validated by the Executive Committee in January 2017, specifies the risks that the Group decides to transfer to the market and the general principles for optimising these transfers: mass purchasing through the implementation of Group insurance programmes, sharing between traditional markets and other types of cover (specialised mutual insurance companies, transfer to the financial markets, etc.), individual and Group deductibles (generally, only large-scale risks are transferred) and optimisation of intermediation expenses.
Implementation methods: since 2004, an update on the situation and costs of covering EDF’s risks through insurance or the transfer of risks to the financial markets has been presented to the Audit Committee. The Audit Committee therefore receives regular updates on insurance and a review of the insurability of Group risks.
Since 2011, a Strategic Insurance Policy Committee (“COSA”), currently chaired by the Finance and Investments Director, provides an opportunity for the business lines and the Finance Department to reflect on changes to and procedures for implementing the Insurance policy, in particular the main characteristics of the programmes.
The Group Insurance Division and the Group Risk Department produce an annual analysis of the risk mapping at Group level, supplemented by the insurance coverage system in place. Based on this shared view, EDF is in a position to improve, and, where necessary, extend the coverage of insurable risks in accordance with the principles established by the Group in this area.
The goal of the Group’s insurance programmes is to integrate the controlled subsidiaries as broadly as possible, in order to homogenise risk coverage and streamline its management, on the one hand, and to control the corresponding insurance costs, on the other hand.
In accordance with the principle of independence of management of the regulated subsidiaries, RTE is not included in the Group’s insurance programmes.(2)
Insurance contracts, according to market practice, include exclusions, limits and sub-limits.
Like all major French and international groups, EDF uses captive insurance companies and mutual insurance companies to supplement coverage provided by the traditional insurance markets.
The EDF’s captive insurance companies are:
It should be noted that Framatome has had a reinsurance company (Tereco) in Luxembourg since 21 December 2018.
Furthermore, EDF is a member of the Oil Insurance Limited (OIL) mutual insurance company in order to deal with the risks of damage (excluding overhead networks) to the property owned by the Group or under concession (EDF and its consolidated subsidiaries). OIL is an insurance mutual company which provides its members with cover for property damage. The scope covered includes inter alia nuclear power plants (the conventional portion), fossil fuel-fired power plants, hydropower facilities, network substations and exploration and production assets.
The Group’s damage insurance programmes combine this cover provided by OIL and covers provided by market insurers.
The EDF group is also a member of the European Liability Insurance for the Nuclear Industry (ELINI), the European Mutual Association for Nuclear Insurance (EMANI), the Nuclear Industry Reinsurance Association (NIRA) and Blue Re, which are mutual insurance companies that manage cover in this field for European nuclear power operators.
The captive and mutual insurance companies enable EDF to reduce the total amount of premiums paid and, more generally, the cost of its insurance schemes.
EDF has taken out a general civil liability insurance program covering EDF, Enedis and their controlled subsidiaries against the financial consequences of civil liability, excluding nuclear damage, that may be incurred by the entities in the course of their activities due to damage caused to third parties. In particular, this programme covers the risks of civil liability associated with the operation of structures (hydroelectric dams, fossil fuel-fired power plants, substations and other network facilities), risks associated with development of the Group’s renewable energy activities (wind, solar, etc.), as well as risks associated with environmental damage (emissions of solid, liquid or gaseous substances).
This cover is purchased to the extent of available capacity under acceptable financial terms on the insurance and reinsurance markets. Maximum cover is €1 billion. Under this programme, the share of risk retained by the Group with regard to an insurable accident (“retention”), including the share of Wagram Insurance company DAC and Océane Re, does not exceed €10 million per insurable accident. Subsidiaries generally opt for lower deductibles that are more consistent with their financial capacity.
EDF holds civil liability insurance covering corporate officers and directors of EDF, Enedis and their controlled subsidiaries against the financial consequences of their civil liability incurred in performing their management functions.
(1) Risks that can be transferred to the insurance markets and the alternative markets.
(2) Exit effective since 31/03/2015.
