The soft market conditions for launch plus-one-placements shows no sign of abating with a series of relatively straightforward satellites due to tap the market in the next couple of weeks.
While rates have been going south for a significant period, the…
The soft market conditions for launch plus-one-placements shows no sign of abating with a series of relatively straightforward satellites due to tap the market in the next couple of weeks.
While rates have been going south for a significant period, the placements of Mexsat-3 in March and then Measat-3b in April set new lows in the current soft market cycle. The former, which is based on Orbital Sciences Star-2 platform, secured a rate of around 8% and according to one insurer a good portion of the circa-US$200m insured was below this rate.
It is understood that space underwriters were extremely reticent to break the 8% mark but given the capacity in the market the broker Aon ISB could secure enough coverage at the required rate.
For those insurers that missed out, the need to participate in placements outweighs the determination to hold out for higher rates and the downward pressure on pricing continues.
To that end, when Willis placed a tranche of insurance for Measat-3b, a block of coverage believed to be around US$280m, the broker secured a rate of approximately 7.9%.
One broker commented: “Because a number of similar satellites are coming to market at the same time we tend to see an acceleration of the soft market conditions. Each new placement is cheaper than the one before.”
Up next to test that theory are two ‘plain vanilla’ spacecraft – Telenor Satellite Broadcasting’s Thor-7 satellite and Azerkosmos’ AzerSat-1 satellites. The former, which is in the process of being placed in the market by Aon ISB, is based on Space Systems Loral’s LS-1300 platform and is to be launched by Arianespace in 2013. Like Mexsat-3, AzerSat-1 is based on Orbital’s Star-2 platform and also launch on an Ariane-5 rocket. Marsh is set to place launch plus-one-insurance for the spacecraft imminently.
