The failure of Israeli satellite operator Spacecom’s Amos-5 looks set to tip the space insurance industry into a loss for this year, SatelliteFinance has learnt. Early indications show a slight loss for 2015 following two small loss/breakeven years for the market.
The likely loss of Israeli satellite operator Spacecom’s (TASE:SCC) Amos-5 looks set to tip the space insurance industry into a loss for this year, SatelliteFinance has learnt.
Insurers will have to wait for this month’s satellite launches to take place before the market can tally up their records, but early indications show a slight loss for 2015 following two small loss/breakeven years for the market.
“Assuming the year remains incident free, we can say with reasonable certainty that the market is going to make a loss of around US$100m-150m,” said one source.
However, this is a relatively small loss for a space industry that has previously seen claims reach as high as US$1bn for a single year.
The news is also thought unlikely to affect the sector’s historically low rates going into next year because the market is still oversupplied with capacity.
Engineers are still hoping to revive Amos 5, which has an annual in-orbit policy worth US$185.5m. Other big insurance losses this year have come from Mexsat-1 (US$390m), Egyptsat-2 (US$75m), and a Russian Progress-M (US$32m) that was delivering cargo to the International Space Station.
The unmanned Progress-M was being carried on a 2.1a Soyuz launch vehicle, and such government missions are not usually insured. Russian space agency Roscosmos blamed its failure on a “design peculiarity”, related to frequency-dynamic characteristics between the rocket’s third stage and the spacecraft.
As SatelliteFinance went to press, state news agency TASS was reporting that Russia’s Kanopus-ST military satellite had failed to separate in time from a similar Russian rocket called Soyuz-2.1b. Coming on the back of a string of launch failures in recent years, the news could intensify the insurance industry’s already heightened wariness of the country’s space programme.
Russia’s government, which has been seeking a firmer grip on its space industry by consolidating its assets, has yet to officially comment on Kanopus-ST.
Despite its losses, space remains an attractive market for insurance investments, largely due its strong track record. Annual premium was estimated to be at just over US$1bn in 2012 on losses of around US$450m.
The market racked up about US$177m in profit for 2011, US$374m in 2010, US$415m in 2009 and US$600m in 2008.
