CGN's 33 in-operation nuclear power units achieve RMB-denominated pricing and settlement for operational period insurance

On September 10, the "CGN In-Service Nuclear Power Plant Operational Period Insurance Project Co-Insurance Agreement" was signed in Shenzhen. The agreement achieves RMB-denominated pricing and settlement for major types of nuclear power plant operational period insurance, changing the convention of China's nuclear insurance market's over thirty years of primarily relying on foreign currency transactions.

Nuclear insurance is an important type of insurance for ensuring the safe and stable operation of nuclear power units. Due to the enormous insured amount of a single policy, it typically requires joint underwriting by hundreds of insurance companies both domestically and internationally, and is regarded by the insurance industry as one of the most special and complex types of insurance.

Since China's first nuclear power plant operational insurance policy——the Daya Bay Nuclear Power Plant operational insurance policy——was issued in 1993, China's nuclear power industry has long followed mature foreign models, with USD-denominated transactions, and insurance actuarial models, pricing standards, and transaction settlement all relying on the international market.

Since 2023, CGN, leveraging the domestic nuclear power industry chain, has collaborated with the China Nuclear Insurance Pool to conduct research on an independent nuclear insurance pricing model. This model incorporates domestic nuclear power unit operational data, integrating a large number of risk factors previously not included in the traditional international system——such as equipment reliability, personnel operation and maintenance performance, local emergency response capabilities, and regional risk characteristics——into the actuarial logic, constructing a pricing model that better fits the true risk levels of domestic nuclear power.

This agreement covers the nuclear operational insurance of 33 in-operation nuclear power units across 8 nuclear power bases of CGN, with coverage amounts exceeding RMB 210 billion. He Haibin, Member of the Standing Committee of the CGN Party Committee and Chief Accountant, stated that in the past, after pricing by the international market, the Chinese side accepted quotations according to the established model; this time, CGN used a local model to lead the completion of the nuclear insurance pricing process and achieved a breakthrough in RMB settlement.

On the pricing side, the independent pricing model is applicable to domestic second- and third-generation nuclear power units, with strong local applicability. On the settlement side, after multiple rounds of negotiations with the China Nuclear Insurance Pool and overseas reinsurers, all parties reached consensus on the RMB pricing benchmark and settlement procedures. Premium collection and claims payment have both been changed to RMB settlement, achieving closed-loop circulation of funds in local currency and reducing the impact of exchange rate fluctuations on the operating results of domestic nuclear power operating entities.

Zhou Junhua, Director of the China Nuclear Insurance Pool, stated that the nuclear insurance market is highly internationalized and has long used USD denomination; changing to RMB pricing and settlement is of milestone significance.

It is understood that the agreement has received responses from the international reinsurance market. Nuclear insurance pools from 6 countries have specifically opened RMB accounts, and nuclear insurance pools from another 10 countries have enabled cross-border RMB settlement services. The signing of this agreement provides an operable path for other domestic nuclear power operators to implement local currency settlement for cross-border insurance. As China's nuclear power industry continues to develop, the coverage of local currency settlement in related insurance fields is expected to further expand.