1. ^aMetro – Maastricht University, P.O. Box 616, Maastricht 6200 MD, the Netherlands.
2. ^bRotterdam Institute of Law and Economics, Erasmus University Rotterdam, Burgemeester Oudlaan 50, 3000 R Rotterdam, the Netherlands. E-mail: Michael.Faure@FACBURFDR.unimaas.nl
3. ^cCentre d'Analyse Economique – UPCAM – FEA, 3, avenue Robert Schuman, Aix-en-Provence cedex 01 13628, France. E-mail: karine.fiore@univ-cezanne.fr

^*We are grateful to the participants in the 12th Joint Seminar of the European Association of Law and Economics and The Geneva Association (Lecce, 15–16 June 2007), to two anonymous referees, and to Professor Pierre Garello (CAE, UPCAM, Aix-en-Provence), Axel Pierru (IFP, Paris) and Professor Göran Skogh (Linköping University) for their useful comments on an earlier version of this paper.

Abstract

The coverage of catastrophic risks, and in particular of industrial and technological risks, raises multiple questions. As nuclear risk is considered to be a special risk, its coverage is not provided in a traditional way. One of the problems in coverage of the nuclear risk is that operators today still to a large extent rely upon insurers. However, nuclear insurance is provided through national pools that operate on a non-competitive basis. These pools are costly for operators and the damage covered remains insufficient. Given their dissatisfaction with these insurance pools, many nuclear operators are now looking for alternatives. Relying on the previous work of Faure and Skogh, the goal of this paper is to examine whether a risk-sharing by nuclear operators could constitute a serious alternative for the current coverage system. In order to examine this alternative we will place it in a concrete context of nuclear operators in Europe. Moreover, we do not merely want to sketch the theoretical possibilities of a risk-sharing by operators (as this has been done before in the literature). We will in addition also examine the financial consequences for nuclear operators in Europe of such a risk-sharing agreement.