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 also 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).
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”.
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 €40 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.
The scope of the conventional damage programme includes virtually all EDF subsidiaries, in particular EDF Energy, Edison, Dalkia and the distribution network operator Enedis.
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 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 anyGroup 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 1,000 m around the production units.
Since 1 July 2017, cyber risk cover has been put in place. The €100 million coverage policy underwritten for two years covers all EDF 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.
Several international conventions govern the civil liability of nuclear facility operators, in particular the Paris Convention of 29 July 1960 on Third-Party Liability in the Field of Nuclear Energy and the Brussels Convention of 31 January 1963, which supplements the Paris Convention (hereinafter the “Conventions”). The Paris Convention introduced a special liability system for nuclear damage, which is strict(even in the absence of fault), limited in terms of the amount (1) and duration, and is exclusively focused on the operator of the nuclear facility. These Conventions apply to the signatory countries that have ratified them, including France and the UnitedKingdom.
(1) With the exception of country Parties that have opted for unlimited liability (Germany, Switzerland, Sweden, etc.).
