60 People, 60 Stories

Nuclear family: Insuring crucial strategic facilities

By Zhou Kun (China Daily)
Updated: 2009-09-30 11:59

Risk management in nuclear projects is of strategic significance in every country, and nuclear insurance plays a vital role, said Wu Gaolian, chairman of China Nuclear Insurance Pool (CNIP).

"CNIP has helped China reduce dependence on foreign reinsurers for domestic nuclear projects and push forward the development of the nations's nuclear industry over the past decade," said Wu, who is also the president of China Reinsurance (Group), at the 10th CNIP's establishment anniversary earlier this September.

China's nuclear industry is expected to continue boom in the next 10 years, providing further opportunity for the nation's burgeoning nuclear insurance business, he added.

CNIP's underwriting ability for overseas projects has soared to $270 million from $15 million 10 years ago, a 12-fold increase, to rank third in the world. Its underwriting capacity in domestic nuclear insurance has rocketed to $415.8 million, ranking the fifth globally.

Founded in 1999 by China Reinsurance Co, the People's Insurance Co of China, China Pacific Insurance Co Ltd and Ping An Insurance Co, the organization is designed to use the huge worldwide underwriting capability to spread nuclear risks globally.

To guarantee insurance obligations, CNIP set a strict requirement for membership that has become a key consideration in evaluating an insurance firm's comprehensive strength.

Over 10 years of development, the number of the group members have grown to 19, comprising the country's 15 major non-life insurance companies - which together had more than 90 percent of domestic market in 2008 - and four reinsurers, as well as the foreign reinsurers Swiss Re and Lloyd's.

With domestic business expanding more than fourfold over the past decade, CNIP underwrote 10 nuclear reactors last year.

At the same time, it has forged close cooperative relations with 22 foreign counterparts, including those in Britain, France and Germany to insure 310 nuclear reactors around the globe, about 70 percent of the world's total.

It has paid out compensation of 120 million yuan over the past 10 years.

With China's nuclear industry poised for further growth, CNIP is sparing no efforts to further expand its underwriting business, Wu said.

CNIP is considering adjusting the limit of each its members' underwriting capacities. Currently, the ceiling is set at 5 percent of the insurance company's total assets.

In 2008, CNIP hosted the conference of the Pools' General Purpose committee. It also hosted the annual Asian Pools' Forum in 2002 and 2006 and the 21st World Nuclear Pool's Forum in 2005.