Space underwriters are contemplating reducing their lines on future Proton launches following the failure of the Proton Breeze-M rocket to place the Yamal-402 satellite into the correct orbit.
The anomaly comes just two months after the Proton carrying…
Space underwriters are contemplating reducing their lines on future Proton launches following the failure of the Proton Breeze-M rocket to place the Yamal-402 satellite into the correct orbit.
The anomaly comes just two months after the Proton carrying Express-MD2 and Telkom-3 suffered a similar fate, and it was the third Proton Breeze-M rocket failure in 16 months.
Those previous failures had already led to a greater differentiation in pricing between the Proton and its rival rockets and this new anomaly will only serve to maintain that gap.
However, one insurer told SatelliteFinance that there is unlikely to be a further significant increase in Proton pricing due to a combination of the rising capacity in the market and the sheer number of spacecraft due to be launched by the workhorse rocket over the next couple of years. As such, underwriters cannot ignore placements using the rocket as they would ultimately lose out on income.
The source did, though, point out that what we are likely to see instead is nervous underwriters cutting back on the lines they commit to.
“They are certainly going to adjust their capacity for the Proton, no one’s going to be piling in. They are going to scale back what they are prepared to commit,” the source said.
That being said, most of the Proton launches for 2013 have already been insured so any change will not impact these. Indeed, one underwriter said that there is very little chance of these being renegotiated, something certain insurers had mooted.
While launch plus one insurance contracts contain a material change clause relating to the risk, this cannot be used for future launches when there is not a specific fault to point to.
One of the issues for the Proton was that this latest failure is understood to have been caused by a different malfunction than the previous ones. While the August anomaly was the result of an issue to the third burn of the upper stage of the Breeze-M, the latest failure is thought to have been due the forth burn shutting down too early. A Failure Oversight Review Board is currently investigating the situation.
So far it seems that the amount of fuel that will be needed to position the satellite into its correct orbital slot will take around four years off of its life. Based on the sum insured, this is likely translate to a claim of around US$110m.
Yaml-402’s owner Gazprom Space Systems has so far filed a notice of occurrence to the insurance market and is expected to claim a partial failure early in the new year.
Proton packages will test market appetite
The first couple of months of 2013 will be a testing time for satellite insurance brokers with two dual satellite launch-plus-one package placements due to hit the market, both on Proton rockets.
Aon / ISB has Mexsat-1 and -2 to place, while Willis is out with RSCC’s Express-AM5 and –AM6. Both brokers have already placed a tranche of the capacity but the majority of the cover is still to be secured.
Unlike Mexsat-3, a relatively plain vanilla satellite built by Orbital Sciences and recently launched by Arianespace, the first two Mexsat birds are much larger more complicated spacecrafts. Based on Boeing’s 702HP platform, each satellite is understood to be being insured for around US$330m. Mexsat-1 is contracted to launch on a Proton, while the Mexican government has yet to decide on whether to launch Mexsat-2 on a Proton or a Sea Launch Zenit.
Both the Express satellites will be launched on Protons and are based on ISS Reshetnev’s relatively new Express-2000 platform.
