With Boeing finally resolving the SkyTerra-1 antenna issue in mid-December, the space insurance community is celebrating another profitable year. SatelliteFinance understands that premiums for 2010 were approximately US$884m, while claims amount to just…
With Boeing finally resolving the SkyTerra-1 antenna issue in mid-December, the space insurance community is celebrating another profitable year. SatelliteFinance understands that premiums for 2010 were approximately US$884m, while claims amount to just US$373m, giving underwriters an annual profit of US$511m.
The only major claims of the year were Eutelsat’s W3b, which suffered a major anomaly to its propulsion subsystem just after its launch into orbit in late October, and Sinosat-6, which also suffered an in-orbit anomaly believed to be connected to a potential leak in the helium pressurant in early September.
Downward pressure on prices likely to continue
The upshot of such a successful year is that launch plus twelve month prices are expected to continue to fall. The average insurance rate paid for the launch plus one of a plain vanilla geostationary communications satellite in 2010 was around the 9.5% mark, having dropped about 1% over the year.
According to SatelliteFinance sources, this figure could fall below 9% by the end of 2011 if launches continue to be successful.
That said many of the satellites that are due to launched in 2011 and even 2012 have already secured launch plus once insurance as they sought to lock-in the favourable rates of 2010 so there seem to be less placements due to hit the market.
Launch differentiation lessens
Another trend of 2010 was that the differentiation in pricing between certain launch providers narrowed. Following a series of proton mission failures spanning 2007 and 2008, satellites using International Launch Services faced higher rates compared to Arianespace. However, the company has worked hard since then and, alongside a consistent launch success, has been proactive in providing technical information to the insurance community. This in turn has lowered the premiums satellites using the company faced.
Having emerged from bankruptcy protection in late-2010, Sea Launch expects to return to flight in Q3 2011. One insurer suggested that the company may face a slight premium at first, given its time away from launching, but that would quickly change when the first couple of launches are completed.
SatelliteFinance understands that Sea Launch was in London at the end of 2010 to brief insurers on its situation and future plans.
