NU Online News Service, March 22, 3:04 p.m. EDT
The disaster following the tsunami that hit the Fukushima Daiichi nuclear power plant in Japan should not create a reduction in insurance capacity for such plants, but it is too early to know if the incident will result in increased pricing, according to JLT Global Nuclear Practice Group.
The unit of London-based insurance broker Jardine Lloyd Thompson Group adds that while the Japan event's impact on the insurance market pricing is uncertain, the political effects will be to slow the nuclear renaissance.
Bernadette Hackett, partner, JLT GNPG, says in a statement: "While potentially this situation may result in increased pricing for nuclear insurance, in reality the nature of the Japanese nuclear insurance pool means that none of the international insurance or reinsurance players should be impacted. However, it is unfortunate that the situation will impact people's perceptions and could therefore have a political impact on the nuclear renaissance that JLT predicted last year."
The broker notes that the situation in Japan with Fukushima Daiichi is incredibly unusual: an earthquake followed by a tsunami wave. While insurers will now probably look more carefully at nuclear facilities in quake zones, overall the broker does not expect the available global nuclear capacity of €2 billion to €3 billion (U.S. $2.8 billion to $4.3 billion at the current exchange rate) to be significantly impacted by this event.
Hackett further comments, "Clearly risk factors have been highlighted by recent events, and we would expect this to result in a slower nuclear renaissance across the globe. Nuclear operations present a complex, multidimensional risk environment and have to be considered very carefully.
"The specialized nuclear insurance market operates through a country pool structure which is subject to a number of international conventions. This means that organizations operating in this area require the support and partnership of an experienced and knowledgeable risk partner to develop innovative insurance and risk solutions for their business operations."
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