Bermuda-based insurer Ironshore International has announced that it is to offer insurance coverage for lenders engaged in the financing of satellite projects. Via its Pembroke Managing Agency subsidiary, Ironshore is to sell a product that provides…
Bermuda-based insurer Ironshore International has announced that it is to offer insurance coverage for lenders engaged in the financing of satellite projects.
Via its Pembroke Managing Agency subsidiary, Ironshore is to sell a product that provides insurance coverage for banks and export credit agencies against the risk of non-disclosure and misrepresentation by the borrowers in a satellite financing transaction.
Pembroke, which is a Lloyd’s managing agent, will lead a consortium of Lloyd’s syndicates to provide capacity of up to US$100m to underwrite the ‘breach of warranty’ coverage.
Neil Stevens, director of the space division at Pembroke, commented: “Access to financing is the most difficult aspect an entrepreneur encounters to facilitate the launch of a new commercial space project.
“The insurance coverage offers a solution that removes the residual exposure inherent in satellite financing during the riskiest part of the mission, which is the launch phase.”
Mark Wheeler, Ironshore International CEO, stated in an in-house interview: “What this enables us to do is respond to a specific gap in the market. The satellite business is based on marine law and marine law has warranties that are absolute. So if a warranty is breached then a loss that is not directly associated with any particular event, may not be covered under the policy.
“This means that somebody financing a satellite launch might be in the situation where the policy that is collateralizing the loan may not respond because of something unconnected to the loss.
“This is a very important breakthrough. So it’s a complicated industry and the underlying contracts are very complicated.”
Stevens added that the Pembroke satellite financing product “fills a gap in the traditional market, by offering protection backed by secure capacity of the Lloyd’s model to support such ventures.”
Up until June of this year, Stevens was the legal counsel and deputy underwriter for the Atrium Space Insurance Consortium. Prior to this he was the VP of space projects at insurance broker Marsh and has also served as the space team lawyer at International Space Brokers, now part of Aon.
