VINCI’s overall approach for arranging insurance cover against risks places a strong emphasis on risk prevention and protection. Given the Group’s decentralised organisation, this approach is defined at several levels of responsibility.
VINCI’s Executive Management, based on recommendations from the Insurance Department, lays down the general guidelines and in particular the standards applicable to all subsidiaries.
Within this framework, and after identifying and analysing the risks relating to their activities, the business line or division risk managers define the optimum trade-off between the level and extent of the guarantees available in the market and the cost level (premiums and uninsured losses) enabling business units to remain competitive. With a view to prevention and cost optimisation, policyholder deductibles are defined on an individual subsidiary basis. Self-insurance budgets have been set up for liability insurance, motor vehicle insurance, and property and casualty insurance in certain business lines.
In addition to subsidiaries’ own specific cover, VINCI also takes out cover on behalf of all its subsidiaries, in particular regarding the fields detailed below:
As a complement to the above, the Group’s Insurance Department takes out cross-business cover against certain risks (transport, automotive, etc.), which is made available to subsidiaries that would not have adopted their own programme and can thus benefit from this pooled purchase.
VINCI has its own brokerage firm, VINCI Assurances, in charge of consolidating insurance policies and harmonising cover within the Group. VINCI Assurances acts solely as a broker for most of the French subsidiaries and bears no financial risk as an insurer. The Group has also set up a captive reinsurance subsidiary, VINCI Re, which began operations in 2022. VINCI Re helps facilitate the placement with insurers of certain risks or programmes only available to a limited extent in the insurance market. This captive subsidiary is also being used to cover programmes at subsidiaries more broadly so as to benefit from a financial risk pooling effect, which will contribute to its efficiency. VINCI Re’s internal risk pooling constitutes an additional risk management tool for the Group.
Loss prevention arrangements are systematically adopted on construction sites as well as operating sites. This policy, which places importance on training, forms part of the approach to quality assurance and the prevention of workplace accidents adopted by VINCI companies.
The Group’s liability claims exposure is characterised, on the basis of available statistics and without prejudging any actual liability in the specific cases involved, by a small number of incidents involving more than €1 million, a few medium-sized incidents, ranging from €100,000 to €1 million, and a high number of small incidents (several thousand) of less than €100,000 each. To a large extent, this last category is borne directly by subsidiaries as policyholder deductibles or under self-insurance cover.
In relation to professional liability or errors and omissions, the risk prevention policy focuses on the limitations of the contractual commitments accepted under new contracts, ensuring the proper match between the commitments undertaken and the mutualised resources in that regard, the early identification of any problems encountered during contract performance, and their rapid and effective resolution to the benefit of all parties concerned.
The risk committee meetings held to review business opportunities before bids are submitted include a specific item on the agenda to address insurance questions (availability of cover, identification of a special exposure and its insurance coverage, appropriateness of policyholder deductible levels, preservation of recourse, etc.).
Operating infrastructure under concession involves potential Group damage exposure to assets under its responsibility, whether accidental or not, that could result in an obligation to rebuild (including the related costs), and to financial consequences resulting from the interruption of operations and debt service requirements to financing providers. Business interruption insurance is intended to allow concession operators to restore an income stream interrupted or reduced by an accidental event affecting the normal operation of an asset, thus enabling the operator to meet any financial commitments towards lenders and cover ordinary operating overheads during the reconstruction period. As a general rule, bridges and tunnels are insured for accidental destruction. Resulting operating losses are also guaranteed, less the deductible, which varies from one contract to another and is expressed as a fixed amount or as a number of days of interruption. Linear infrastructure (motorways and rail lines), the complete destruction of which is deemed highly unlikely, is not systematically covered for business interruption losses, since the total and prolonged shutdown of their operations is not taken into consideration. Deductibles are determined on a case-by-case basis to ensure that the concession’s earnings are not materially affected by an accidental interruption in traffic.
In July 2023, the Group became a concession holder operating high-capacity solar photovoltaic power plants (e.g. the Belmonte solar farm in Brazil with an installed capacity of 588 MW). Obtaining insurance for this type of asset most often involves business interruption cover, which is defined specifically, depending on the remuneration model set out in the concession contract. Insuring these facilities against natural events requires vigilance in relation to specific perils, such as hail, flooding, brush fires, and possibly storms and cyclones, in terms of both the quality of insurance coverage acquired and the prevention measures effectively implemented at the site. Particular attention must be devoted to redundancy measures for critical equipment (e.g. power transformers used at the substation connected to the grid).
