Introduction

Lloyd’s of London’s nuclear-risk exclusions were originally designed to address the hazards of self-sustaining chain reactions in fission power, yet they have not evolved to accommodate fusion power’s unique risk profile. As a result, emerging fusion startups face unwarranted barriers, since current exclusions assume meltdown scenarios, long-lived radioactive waste, and other conditions specific to fission.¹ In contrast, fusion’s self-limiting physics prevent runaway reactions, and early prototypes suggest significantly lower accident risk than traditional fission reactors.² Despite these differences, the Lloyd’s Market Association 2023 revision (LMA5621) retains broad restrictions on all “nuclear” activities—fusion included—thereby hindering insurers from covering a technology many consider pivotal to the world’s future energy mix.³

This whitepaper argues that Lloyd’s should modernize its nuclear-risk exclusions to distinguish fusion from fission—facilitating greater capital inflow, reducing barriers for pilot projects, and allowing the London market to assert leadership in underwriting clean-energy innovation. 

The insurance industry’s stance on nuclear energy is gradually shifting. Chubb CEO Evan Greenberg recently described next-generation nuclear as an “opportunity hiding in plain sight” and affirmed a willingness to insure it.⁴ Munich Re has similarly expressed interest in expanding nuclear capacity if clear liability frameworks exist, noting that fusion’s modular designs and limited accident potential position it as an attractive underwriting candidate. Despite over $13 billion in private investment, fusion developers still struggle to secure coverage due to outdated classifications that do not differentiate between fusion and fission, imposing higher capital costs and risk premiums.⁵ Other insurers and reinsurers—particularly in the U.S. surplus lines and Bermuda markets—are responding more flexibly, highlighting a growing discrepancy between Lloyd’s exclusions and evolving market practices. Lessons from renewable energy, spaceflight, and green hydrogen underscore that insurers who lead in affirmatively covering emerging sectors often enjoy a strategic advantage. As the IAEA and INRA collaborate with national regulators on fusion-specific safety standards, a clear opportunity exists to replace blanket exclusions with science-based underwriting models, reflecting fusion’s actual risk characteristics. By working in partnership with developers, reinsurers, and regulators, Lloyd’s can champion a responsible, risk-informed approach to fusion coverage—transforming insurance from an obstacle into an enabler of this transformative energy technology.

↓ Download White Paper

Sources

1. LMA5621. Nuclear Energy Risks Exclusion. Lloyd’s Market Association, 2023.;  LMA5203. Limited Nuclear Risk Exclusion. Lloyd’s Market Association, 2012.

2. Fusion Industry Association. FIA Handout - Fission & Fusion. 2023.

3. Lloyd’s Market Association. LMA5621: Nuclear Risk Exclusion and its Application to Fusion Energy. 2023;  Chubb. “CEO Evan Greenberg on Embracing Nuclear Energy Risks.” Chubb Investor Relations, 2024.

4. Chubb, 2024.

5. FusionX. “Private Investment in Fusion Surpasses $13 Billion.” FusionX Reports, 2025;  IAEA. “Fusion Safety Standards.” 2025.