The scope of the conventional damage programme includes almost all subsidiaries of EDF, notably Enedis, EDF Energy, Edison and Dalkia.
Wagram Insurance Company DAC, the Group’s captive insurance company, together with other insurers and reinsurers, provide extensions of cover (property damage and business interruption) in addition to the covers provided by OIL, bringing the maximum up to €1 billion.
Under this conventional damage programme, the Group’s retention per claim, including the deductible (which varies by subsidiary) and the share of the risk retained by Wagram Insurance Company DAC and by Océane Re, does not exceed €15 million.
This programme provides cover for business interruption for most subsidiaries in the event of property damage, but not for EDF, which does not benefit from this cover. The actions and measures implemented to prevent industrial and environmental risks and limit their effects are described in particular in section 2.1.2 “Focus on the 2nd line of control: cross-functional control systems”.
EDF has taken out insurance policies covering specific construction risks (construction all-risk and erection/testing all-risk policies). These policies are not included in any Group programme but are purchased on an ad hoc basis for major construction projects such as the EPRs of Flamanville and Hinkley Point C, the construction of combined cycle power plants, dams, etc.
These covers are specifically monitored and are renegotiated if unforeseen events occur during the construction projects.
In connection with the renewal of the storm insurance coverage, Enedis signed with Swiss Re on 27 June 2016 a parametric insurance contract covering the aerial transmission network against the consequences of exceptional storms.
With a term of five years and total cover of €275 million, this innovative insurance contract triggers, in the event of a claim, parametric compensation based on a composite index for wind speeds recorded by Météo-France stations weighted by the vulnerability of the distribution network in each region of the Enedis concession area.
The overhead networks of the Island Energy Systems, for their part, do not benefit from “property damage” coverage, except within a radius of 1000 m around the production units. Damage to these networks could have an adverse impact on the Group’s financial position in the absence of insurance cover or if cover is inadequate. In addition, renewing or taking out these specific covers may be difficult or costlier due to the impact, frequency and magnitude of natural disasters experienced in recent years.
Since 1 July 2017, cyber risk cover has been put in place. The €100 million coverage policy underwritten for two years covers all EDF SA entities and the subsidiaries of the Group. This coverage was renewed on 1 July 2019.
Its purpose is to cover the expenses incurred to handle major disruptions caused by a cyber-attack against the Group’s information systems.
In France, EDF’s current insurance policies are in compliance with French Act no. 68-943 of 30 October 1968, Act no. 90-488 of 16 June 1990, and Act no. 2006-686 of 13 June 2006 (known as the “TSN” Act), now codified in the French Environmental Code and which codified the civil liability obligations imposed on nuclear facility operators by the Paris Convention (see section 1.5.3.2 “Specific regulations applicable to basic nuclear facilities”).
The French Law on Energy Transition for Green Growth enacted on 17 August 2015 subsequently amended the provisions of Articles L. 597-28 and L. 597-32 of the French Environmental Code and, in particular, the limits on the civil liability of nuclear operators which, since 18 February 2016, were brought to €700 million for nuclear installations (€70 million for low-risk installations) and €80 million for risks during transport.
In order to comply with the new statutory ceilings, EDF issued a tender notice on 10 August 2015 entitled “EDF SA Nuclear Liability Insurance Programme” to obtain and set up appropriate insurance coverage for nuclear civil liability and related claims management.
The insurance coverage obtained following this invitation to tender allows the Group to meet the new obligations while controlling their financial impact. The insurance is shared between the nuclear insurance market (AXA, reinsured by the French nuclear pool Assuratome), the Group’s captive insurance companies, and the nuclear mutual insurance company ELINI.
This coverage, which took effect on 18 February 2016, was renewed for a period of three years on 18 February 2019. In view of the likely evolution of the obligations imposed on the operator during the period (notably the entry into force of the Protocols amending the Paris and Brussels Conventions) (see section 1.5.3.2 “Specific regulations applicable to basic nuclear facilities”), clauses allowing an exit from the contract have been included.
On 18 February 2019, all the operations and tools for claims management were entrusted to EQUAD, a company with a high-performance IT tool as well as the necessary human resources and network.
In the United Kingdom, where EDF Energy operates nuclear power plants, the nuclear operator’s civil liability rules are similar to French rules. The UK Parliament approved on 4 May 2016 the “Nuclear Installations Order” (order transposing the above-mentioned amending Protocols of February 2004), which makes substantially the same changes as the French TSN Act in 2006 but which, for the most part, shall enter into force only in conjunction with the Protocols.
This Order will raise the British operators’ obligations from the current limit of £140 million to the equivalent of €700 million, and they will be progressively increased over a five-year period to reach a cap of €1.2 billion.
EDF Energy is currently insured by ELINI and Wagram Insurance Company DAC. There insurance company Océane Re shares in this risk under the reinsurance contract it issues for the benefit of Wagram Insurance Company DAC.
For further information on the legislation concerning nuclear operators’ civil liability, see section 1.5.3.2 “Specific regulations applicable to basic nuclear facilities”.
Under the Paris Convention, the operator that is the “shipper” is civilly liable for transport of nuclear substances (unless stipulated otherwise). Since 18 February 2016, the liability ceiling has been set at €80 million with an unchanged scope of damage(see section 1.5.3.2 “Specific regulations applicable to basic nuclear installations”), and will subsequently be extended to a broader scope of damage admissible for compensation when the revised Paris Convention comes into force. This liability is as of now covered by the aforementioned nuclear operator civil liability policy.
The cover obtained through EDF’s membership in the OIL mutual insurance company provides protection against material damage in cold areas, excluding the consequences of a nuclear accident, of 60% of $400 million in excess of a deductible of $15 million, both in France and the United Kingdom.
Until 30 September 2018, in addition to that coverage, physical damage (including following a nuclear accident) to EDF’s nuclear plants in France and EDF Energy’s nuclear plants in the United Kingdom, and nuclear decontamination costs, were covered by a common insurance policy principally involving the British atomic pool National Risk Insurers (NRI), Axa and Allianz (reinsured by the French nuclear pool Assuratome), and the European Mutual Association for Nuclear Insurance (EMANI), for a total capacity of €1,760 million above an amount of €240 million.
As from 1 October 2018:
