This work, carried out in close collaboration with the Group Insurance Division, allows for continuous improvement of the quality of information on insurable risks in step with programme renewals prevention inspections (evaluation of maximum possible losses, “MPL”). In connection with prevention actions, the Group Insurance Division establishes and oversees implementation of the site inspection programmes.
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:
Since 2011, a Strategic Insurance Policy Committee (“COSA”) provides an opportunity for the business lines and the Finance Department to reflect on changes to and procedures for implementing the policy covering Insurance, in particular on the main characteristics of the programmes.
The Group Insurance Division and the Group Risk Department perform an annual analysis of the risk mapping at 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 first, to homogenise risk cover and streamline its management, and secondly, to control the corresponding insurance costs.
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’s Group’s (1) captive insurance companies are:
Furthermore, EDF is a member of the Everen (formerly Oil Insurance Limited (OIL)) mutual insurance company in order to deal with the risks of damage (excluding overhead networks) to the property owned by or under concession to the Group (EDF and its consolidated subsidiaries). Everen 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 Everen and cover provided by captive insurance companies and 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, to reduce 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 mitigate their effects are described in particular at the beginning of this section in the paragraph titled “2nd line of control: risk management and control of activities”.
This cover is purchased to the extent of available capacity at 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 has a civil liability insurance programme 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 cover provided by Everen increasing the maximum 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 €35 million.
This programme provides business interruption cover for most of the 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 mitigate their effects are described in particular at the beginning of this section in 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 €70 million cover protects EDF and the Group’s controlled subsidiaries for the expenses incurred in handling major disruptions caused by a cyber attack on the Group’s information systems.
(1) Framatome and EDF Energy have their own captive insurance companies to meet their own coverage needs.
