Russian satellite operators RSCC and its Indonesian counterpart Telekomunikasi Indonesia are on the verge of making total loss claims for their respective Express-MD2 and Telkom-3 satellites following the Proton launch failure at the beginning of…
Russian satellite operators RSCC and its Indonesian counterpart Telekomunikasi Indonesia are on the verge of making total loss claims for their respective Express-MD2 and Telkom-3 satellites following the Proton launch failure at the beginning of August.
The companies are thought to have filed a notice of occurrence and are due to provide a notice of loss claim in the coming days, around the same time as the Russian Failure Review Oversight Board (FROB) is expected to conclude its investigation into the cause of the failure.
SatelliteFinance understands that the overall sum insured for both spacecraft was around US$220m, of which around US$180m covers Telkom-3 and US$40m covers Express-MD2.
Though the latter is a less powerful satellite, with just 8 C-band and 3 L-band transponders, and is believed to have been the co-passenger on the launch, the sum insured is still relatively low in comparison to the likely cost of the satellite.
When RSCC lost Express-AM4 following the failure of another Proton in August 2011, the satellite operator was quick to use the proceeds of the insurance indemnity to fund its replacement, Express-AM4r. The company has yet to indicate whether it will order a similar replacement this time round.
As and when the total loss claims are made, it is thought unlikely that they will have a significant impact on the current low level of launch-plus-one pricing. One insurer argued that with the market still on track to make a profit and the modest coverage of both Express-MD2 and Telkom-3 being spread widely around the underwriters, the downward pressure on rates will remain.
Aon / ISB placed the insurance for Express-MD2 while Marsh placed Telkom-3.
Timing is everything
While the soft market conditions are likely to remain, space underwriters do expect a premium to be placed on future Proton rocket launches given its recent history of failures.
This will be put to the test in the coming months as Willis is due to hit the market with a dual satellite launch-plus-one placement for RSCC’s Express-AM5 and –AM6 satellites. Both are due to be launched by Proton rockets and timing will be key for the broker.
Express-AM5 is due to be launched in the first quarter of 2013 and Willis will want to wait for the findings of the FROB and hopefully a couple of subsequent successful Proton launches before testing the market.
Unlike Express-MD2, the AM5 and AM6 satellites are sizeable spacecraft and are based on ISS Reshetnev’s relatively new Express-2000 platform.
In contrast, Aon /ISB was somewhat fortuitous in its placement the launch-plus-one insurance for Gazprom Space Systems’ Yamal -300k and -402 satellites. The broker is understood to have wrapped up the insurance just prior to the August launch failure.
As with the RSCC satellites, Gazprom’s spacecraft are due to be launched by a Proton rocket.
