(Yicai) Sept. 11 -- China General Nuclear Power Group, a major state-owned atomic energy company, has signed the country's first ever nuclear insurance policy priced and settled in Chinese yuan, a milestone that reduces its exposure to currency swings and represents another step in the redback’s internationalization.

Signed yesterday, the policy covers 33 operational reactors across eight CGN nuclear power plants and provides CNY210 billion (USD31.3 billion) of insurance coverage, the Shenzhen-based company told Yicai the same day.

Nuclear insurance is a highly specialized field, with policies typically syndicated among hundreds of insurers and reinsurers worldwide because of the scale of potential liabilities. CGN’s deal breaks with China’s more than three decades of reliance on international market practices, including US dollar-based pricing, actuarial models, and settlement.

With China’s nuclear power sector growing rapidly, domestic firms have sought greater control over insurance pricing. CGN and the China Nuclear Insurance Pool, a group of insurers and reinsurers, began a joint initiative in 2023 to come up with an independent pricing framework that more accurately reflects the actual risk level of China’s atomic power industry.

The CGN deal is the first to use a pricing model developed in China as the primary basis for determining nuclear insurance premiums while also settling transactions entirely in yuan.

It creates a complete local currency financial cycle and effectively removes the impact of foreign exchange rate volatility on the financial performance of China’s nuclear power producers, He Haibin, CGN’s chief accountant, said at the signing ceremony.

The agreement has also garnered a positive response from the international reinsurance market. According to CGN, nuclear insurance pools in six countries have already opened dedicated yuan accounts, while counterparts in another 10 have enabled cross-border yuan settlement services.

China has 62 nuclear reactors in operation capable of generating 66.1 million kilowatts, ranking the country second worldwide, and another 58 under construction that will add a further 69.5 million kW, which will take it to the top of the global ranking, according to the National Energy Administration.

The China Nuclear Insurance Pool was set up run 1999 by China Re Group, People's Insurance Company of China, China Pacific Insurance, and Ping An Insurance. As of the end of last year, it had 31 members.

Editors: Dou Shicong, Martin Kadiev