Insurance of Nuclear Risks

Transcription

1 Insurance of Nuclear Risks 1 Risk Management Risk management options Retain Avoid Control Transfer Industry Mutuals Other financial security Private Insurance Market State 2 1

2 Market Capacity TPL (in bio) Mutuals: expansion in future? 3 Insurance 2 What is insurance? Contract between two parties Basis: utmost good faith Insurer pays sum of money Insured pays premium Condition: unknown event Insured must have insurable interest 4 2

3 Insurance Pool Association of Insurers who jointly insure a particular Risk or class of Business 5 Risk Sharing Risk Insurer Co-insurers A B C Reinsurers

4 Historical Background 1 Nuclear Electricity Production resulted in Insurance Problems: Unknown, poorly perceived risk (nuclear bombs 1945) Low Frequency Outlook High Catastrophe Potential Few insured Installations Accumulation Potential 7 Historical Background 2 Result: nuclear exclusion clause in insurance policies Compensation: Nuclear Insurance Pools 8 4

5 Fundamental Principles 1 Pools are market wide Spread of risk Participation by insurers, otherwise not able to write nuclear insurance Concentration of knowledge/experience capacity enhancement cost efficiency Appropriate claims settlement entity Maximum security to insureds and victims: controlled membership, internal/external solidarity 9 Fundamental Principles 2 Acceptances for Pool-Members net retention Ensures concentration of nuclear risks in pool transparency highest possible commitment to nuclear underwriting 10 5

6 Fundamental Principles 3 Reinsurance with other nuclear pools world wide spread of risk Enables easy access to global insurance capacity security to insureds and victims Facilitates rapid and easy interchange of information 11 Nuclear Insurance Business Flow Insurance of installations in country B Member 1 Member 2 Member 1 Pool country B etc Member 1 Member 2 Member 2 Member 3 Pool country A reinsurance reinsurance Pool country C Member 3 etc etc Insurance of installations in country A Insurance of installations in country C 12 6

7 Preriquisites for Pool Cover convention adherence - o acceptable domestic nuclear legislation techn. acceptability of installation - o adequate regulatory control participation of domestic insurance industry - o facility to reinsure outside domestic market premium payment in hard currency - o - freedom from exchange control sufficient country rating no trade restrictions 13 Subject of Insurance All Pools: Nuclear Power Stations Most Pools: - Other Installations of the Nuclear Fuel Cycle - Nuclear Transports Some Pools: Radioisotopes or Nuclides 14 7

8 Types of Insurance Cover Onsite Material Damage Insurance Offsite legal obligations Liability insurance 15 Third Party Liability Insurance 2 Relation to international Conventions Strict, no-fault liability Channelling of liability Liability limited in time and (so far) amount Requirement of financial security: insured amounts vary per country 16 8

9 Insured TPL indemnity Limits A selection (in $) Japan 1,558m Brazil 237m U.K. 221m Switzerland 1,090m S Africa 450m P.R.China 45m U.S.A. 360m Czech Rep. 422m Minimum Revised Vienna & Paris Convention amounts are SDR 300m ($ 469m) resp. 700m ($ 945m) 17 Third Party Liability Insurance Cover Nuclear perils Non-nuclear perils Exclusions Limitations - war & warlike events - exceptional natural disasters -extinction periods > 10 yrs. - terrorism (sometimes) - public law based environmental damage 18 9

10 Third Party Liability Insurance Nuclear material in transit Relation to Conventions Liable operator - sender -recipient -carrier Liability per voyage Sum insured varies per country Complicated position of non-convention countries 19 Claims Experience Nuclear TPL insurance: Limited large loss experience - Chernobyl and Fukushima not insured - Tokai Mura - Three Mile Island within 24 hours of accident American Pool had office near facility making emergency assistance payments In general: wide expertise in handling multiple claims 20 10