Space insurers profitable in first half of 2008

Space insurers earned approximately US$411 million in premium in the first two quarters of 2008, putting the market in a profitable position with US$252 million in reported claims.
However, five additional in-orbit failures, mean insurers will perceive market volatility persisting through the end of the year, Aon notes in a release.
The failures include partial failures of AMC 16, Nigcomsat, Galaxy 26 and Eutelsat W5.
AMC 16, an A2100 type satellite, continues to lose solar array strings with power loss rumoured to be now at 25%, sufficient to trigger a claim, Aon notes.
“The market stiffened its resolve for premium rate increases following losses at the end of 2007 and early 2008,” Peter Elson, senior managing director of Aon Space, commented in the release. “Some operators, such as Inmarsat and other Aon clients, took advantage of favourable market conditions in 2007 to buy long-term policies. Others that held back are feeling the brunt of the market’s reaction. However, quality operators with good technical risks presented to the market effectively can still secure premium rates below long term trends.”
Elson added: “The market is differentiating among operators and flight proven spacecraft and launch vehicles. Well-received risk profiles from the top tier operators will continue to attract significant competition for their business. Aon expects further differentiation in pricing not only between risks but also among insurers for any given risk. Only spacecraft and launch vehicles with a significant number of consecutive successful missions will be afforded the best rates in the market.”