Luxembourg-based mutual Nuclear Industry Reinsurance Association (NIRA) is looking to write more business in China as the country ramps up its nuclear facilities, said Managing Director Danny Van Welkenhuyzen.
“Reinsurers in the region have either limited or no involvement in nuclear,” he said in an interview with Asia Insurance Review. “Because this is such a restricted market, nuclear insurers are looking for net line reinsurance capacity and this is something we can provide. NIRA has been doing business with local insurers and we are happy with the outcomes so far.”
According to the World Nuclear Association, mainland China has 30 nuclear power reactors in operation and 24 under construction. Additional reactors are being planned, which will give more than a three-fold increase in nuclear capacity by 2020-21.
Providing net capacity only
NIRA reinsures nuclear risks on a worldwide basis, covering installations in Europe, US, Canada, South Africa, the Middle East and China. It offers up to US$80 million in capacity but Mr Van Welkenhuyzen is positive that this will grow to around $100-$150 million over the next five years.
NIRA offers only net capacity, and writes business mostly direct with primary insurers, although some business is also arranged via brokers. Besides pure capacity, it transfers technical know-how to clients through its “reinsurance days”, which include working sessions whereby NIRA’s engineers and underwriters provide expertise to cedants.
In China, NIRA provides reinsurance to captives of atomic utilities while in South Korea, it offers capacity to the major domestic players. So far, it does not conduct business with companies in Japan.
Apart from developing business opportunities, NIRA is looking to expand its membership, currently standing at 43, mostly from Europe and North America. Last September, it opened the door for nuclear operators in other parts of the world to join the mutual as members by changing its by-laws. Some companies have expressed interest in joining, although they have not made firm plans to do so yet, he said.
Nuclear energy is necessary
Looking ahead, NIRA will continue to focus its efforts on developing countries exploring nuclear energy. “Construction of nuclear facilities is going on in the Far East and the Middle East, and the likelihood of further development is imminent,” noted Mr Van Welkenhuywen.
The anti-nuclear movement, he said, “is more of a political concern in some countries compared to others. Everyone needs energy, and the right mix includes nuclear. Solar, wind, renewables and other sources will not completely replace atomic or conventional sources”.
In 2015, NIRA recorded net premium earned of EUR6.5 million (US$7.4 million), an 18% increase y-o-y, and earnings of EUR4.3 million, a fall of 34% y-o-y.