SMRs: Advancing Energy Security and Decarbonization

SMRs: Advancing Energy Security and Decarbonization
August 20, 2026 5 mins

SMRs: Advancing Energy Security and Decarbonization

SMRs Advancing Energy Security and Decarbonization

As investment in small modular reactors accelerates, project success will depend on more than technology. Early attention to risk, insurance and regulatory certainty can help improve insurability, support financing and accelerate deployment.

Key Takeaways
  1. Early risk planning is essential. Developers, lenders and insurers should engage early to assess construction risk, liability transfer, nuclear exclusions and operational insurance requirements.
  2. Regulatory certainty and risk transparency are central to project confidence. They shape project schedules, financing and insurability.
  3. Comprehensive insurable risk breakdowns conducted in collaboration with consultants and engineers can secure design insurability and accelerate deployment.

As nuclear power experiences renewed momentum, small modular reactors (SMRs) are attracting growing attention from governments, developers, lenders and insurers. Their appeal lies in their ability to support clean energy ambitions, strengthen energy security, and offer a potentially faster and more scalable alternative to traditional large-scale nuclear projects.

SMRs’ compact, modular design allows major components to be manufactured off-site. This can reduce construction complexity, improve deployment flexibility and make nuclear technology viable across a wider range of locations and uses.

Why SMRs are Gaining Momentum

SMRs are being considered across a growing range of applications, including power generation, heating, desalination, hydrogen production and industrial use. Countries including the United States, Canada, China, Russia, the United Kingdom, France and several European countries are already investing in SMR development as part of broader strategies to diversify energy supply, reduce emissions and improve resilience. 

For infrastructure developers and investors, SMRs offer several potential advantages over traditional large-scale nuclear projects:

  • Lower upfront capital requirements
  • Faster construction timelines
  • Greater flexibility in deployment
  • Wider access to private finance

Positive political sentiment and public funding are helping to accelerate regulatory development and early-stage commercialization. 

However, momentum alone will not determine success. Regulatory approval processes continue to evolve, and licensing timelines remain a key consideration for project delivery and financing. At the same time, the ability to establish manufacturing capacity for reactor modules, heavy forgings and other long-lead components will play an important role in determining how quickly SMRs can be deployed at scale.

Risk and Insurance Considerations

Despite their potential advantages, SMR projects remain complex infrastructure developments with distinctive construction, operational and liability considerations. Effective risk management requires a comprehensive approach that addresses construction all risks, third-party liability, delay in start-up, marine cargo and terrorism cover, alongside planning for nuclear-specific exposures.

Several factors continue to influence insurability and investor confidence. These include limited operational track records, high capital costs, the volume of competing designs and regulatory uncertainty. Together, these factors reinforce the importance of early risk assessment and stakeholder engagement.

Not all SMR projects should be viewed as first-of-a-kind (FOAK) developments. Many view SMR projects as by default, but this is not always accurate. A significant number of leading SMR programs adapt proven Gen III and Gen III+ reactor designs with lower output to reduce technological and execution risk. Using established operational data and regulatory precedents helps streamline deployment and accelerate project maturity.

Comprehensive insurable risk breakdowns conducted in collaboration with consultants and engineering teams can help secure design insurability and accelerate deployment.

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Nuclear continues to face risk capital constraints, so it’s crucial to rethink traditional solutions. Simultaneously, there is a surge of interest from new carriers exploring entry into the class. This has the potential to diversify risk capital sources and reshape the market’s competitive dynamics.

Sam Beaver
Power Leader, Global Broking Center

Conventional construction policies typically exclude radioactive contamination, meaning nuclear risk must be addressed separately as the project moves toward testing, commissioning and operation. Particular attention should be paid to the transition period between fuel loading and commercial operation.

During this phase, close coordination between construction and operational insurers is operators and insurers can help ensure liabilities transfer appropriately as the project progresses toward operation.

Turning Momentum into Deployment

Interest in SMRs continues to grow as governments and investors seek new pathways to strengthen energy security and support decarbonization. However, long-term success will be determined by the industry's ability to move projects from development to deployment at scale. Doing so will require not only technological innovation, but also confidence in project delivery, regulatory frameworks and risk management. “As interest in SMRs grows, successful project delivery will depend on more than technology and financing,” says Jean-Philippe Monnez, Industry Lead, Nuclear & Défense, France. He continues, “Early engagement with experienced risk engineering, insurance and claims specialists can help stakeholders identify emerging exposures, structure appropriate cover and support the long-term viability of SMR deployment.”

As commercial deployment accelerates, early collaboration across the project ecosystem can help improve transparency, align stakeholder expectations and support access to financing and insurance capacity. These factors will be critical to building confidence in a sector that remains in the early stages of commercial development. “Regulatory certainty and risk transparency are often as important to project success as the technology itself,” emphasises Barbara Gutierrez, Managing Director, Aon’s Natural Resources and former U.S. Federal Regulator. “Early coordination among developers, regulators, insurers, lenders and the community, will be critical to making SMRs financeable and scalable.” 

Turn Nuclear Ambition into Bankable Delivery

Expert guidance is key to cutting through the regulatory, risk and insurance maze in nuclear. Aon’s global industry experience helps clients take their projects from concept through construction to full operation efficiently.

Let’s connect to explore your goals and share what we’re learning from complex nuclear programs across markets — so you can scale safely, predictably and with confidence.

Aon’s Thought Leaders
  • Sam Beaver
    Power Leader, Global Broking Center
  • Brian DeBruin
    Managing Director, Natural Resources/Power & Renewables, United States
  • Barbara Gutierrez
    Senior Vice President, Natural Resources/Power & Renewables, United States
  • Jean-Phillipe Monnez
    Industry Leader for Nuclear & Défense, Europe

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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