Nuclear risk was historically underwritten using well-established analyses. For decades, the industry assessed nuclear facilities using established claims histories, mature catastrophe modelling and clearly defined regulatory regimes supported by government-backed indemnity frameworks and national nuclear insurance pools. Insurers could price risk, allocate limits and secure reinsurance support with relative confidence. A prime example of this is Lloyd’s of London, which has historically operated a tightly defined and highly specialised nuclear class, underwritten by a small number of syndicates. With technological developments, the landscape is changing and insurers are reassessing how to underwrite the next-generation of nuclear technologies.
The rise of nuclear fusion, Small Modular Reactors (“SMRs”) and Advanced Modular Reactors has introduced new technological, regulatory and supply chain risk variables at a pace not previously encountered. Unlike fission, fusion facilities lack commercial loss histories and operate within developing regulatory frameworks, making traditional underwriting models difficult to apply. The question for insurers is how to adapt.
Fusion Coverage and Underwriting
Fusion energy presents insurers with an underwriting challenge: a high complexity, low data risk environment. The absence of historical claims means there is no credible frequency-severity curve to inform pricing. Failure modes remain largely theoretical, based on experimental and prototype outcomes rather than long term operational evidence. This creates pricing uncertainty, as risk cannot be benchmarked against past loss events, and can lead to cautious policy positions, which are reflected in narrower terms and the selective release of coverage.
Insurers are evaluating fusion using proxies drawn from other emerging tech sectors such as space AI and autonomous infrastructure - but the level of uncertainty in fusion risk behaviour is arguably greater than those in other sectors, where data generation can be scaled more quickly and regulatory oversight matured earlier.
Advanced nuclear technologies, such as SMRs, are seeing increased engagement from primary carriers, but coverage is often fragmented and conditional. Primary insurers are showing greater appetite for discrete aspects of risks, but policy limits are typically constrained by reinsurer appetite and aggregation risk concerns.
The main constraint in nuclear fusion coverage is not willingness but capital support. Even when primary insurers are open to underwriting parts of next generation nuclear risk, the size of the policy limits they can offer is shaped and often capped by the level of capital available from reinsurers, who remain cautious in areas where there is limited historical data to build pricing confidence and where catastrophic accumulation scenarios cannot be modelled with certainty.
For fusion projects, this results in restricted primary capacity or project-specific limit caps, as reinsurers may be unwilling to commit meaningful capital until risk input becomes more credible and reproducible. Nuclear insurance pools and sovereign backstops currently play a central role in supporting fission risk. Fusion has not yet built an equivalent framework, contributing to its position towards the outer edge of reinsurer comfort.
NC Fusion
The insurance market is starting to adapt to developments in fusion technology. We are already seeing new products that address the different risk structure of fusion projects and close potential gaps in policies designed for fission projects. For example, in late 2025, the Lloyd’s market launched NC Fusion, an insurance facility introduced by Tokio Marine GX and specialist managing general agent Northcourt, which provides tailored cover for fusion projects, from research and development through to potential commercial deployment.
Conclusion
As nuclear technology advances, the insurance market faces a growing challenge: how to provide and structure coverage for technology with limited historical data loss and finite reinsurance-backed capacity. The result is a market where robust coverage is significantly harder to secure, price, and deploy at scale compared to traditional fission projects.
As nuclear technology evolves, so too must the insurance structures that support it. The underwriting future of nuclear especially fusion will be defined by those who can evidence, quantify and structure risk, and the launch of NC Fusion is a positive step on the journey.
