Principles of execution :
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 perform an annual analysis of the risk mapping at the Group level, supplemented by the insurance cover system in place. Based on this shared view, EDF is in a position to improve, and, where applicable, extend the cover 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 cover and streamline its management, on the one hand, and to control the corresponding insurance costs, on the other hand.
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 cover provided by the traditional insurance markets.
The EDF group’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 a mutual insurance company dedicated to the needs of companies in the energy sector, 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 general civil liability insurance 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. The actions and measures implemented to prevent industrial and environmental risks and limit their effects are described in particular at the beginning of this chapter under the paragraph titled “2nd line of control: risk management and control of activities”.
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 executives 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, 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 €25 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 at the beginning of this chapter under the paragraph titled “2nd line of control: risk management and control of activities”.
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.
Since 1 July 2017, cyber risk cover has been put in place. This cover was renewed on 1 July 2021.
This €75 million guarantee covers EDF and the Group’s subsidiaries for the expenses incurred to handle major disruptions caused by a cyberattack on 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 United Kingdom.
Protocols to amend the Paris and Brussels Conventions were signed on 12 February 2004 but have still not entered into force. Ratification and entry into force of the revised Conventions are currently scheduled for 3 January 2022. They require higher amounts of compensation than the original conventions in order to cover a greater number of victims and types of damage that are eligible for indemnification. The State in which the nuclear facility of the operator that is liable for causing the damage is located is liable for amounts above the €700 million for which the operator is liable, up to €1,200 million (provided that said State is a Contracting Party to the Brussels Convention). Over and above this amount, the Member States that are Contracting Parties to the Brussels Convention are liable up to a maximum amount of €1,500 million. In addition, for personal injury only, the time limit to claim compensation has changed from 10 years to 30 years from the date of the incident. The definition of “nuclear damage” is evolving and includes, in addition to damage to persons and property, economic losses, the cost of protective measures, the cost of measures to rehabilitate damaged environments, and certain other losses resulting from damage to the environment.
(1) With the exception of Contracting Parties that have opted for unlimited liability (Germany, Switzerland, Sweden, etc.).
