The largest satellite “launch insurance package ever placed has been completed by broker Willis Inspace, with a Lloyd’s underwriter leading the risk,” for Europe’s Eutelsat, the world’s third largest satellite operator, notes an article on the Lloyd’s web site (www.lloyds.com).
Xavier Lacombe, Deputy Managing Director of Willis Inspace, stated: “The insurance package structured for Eutelsat is the largest package ever placed for a satellite operator and Willis Inspace is delighted to have delivered this. We have placed the cover with more than 20 international space insurers, providing Eutelsat with a long-term, competitive and flexible scheme.” He added that the consolidation over the past five years in the market had been a driver of these new types of programs.
The Eutelsat package covers some $2.4 billion of risks. Lacombe noted that the capacity for the risk was not an issue. “While they are packaged each risk is individually underwritten which does not create problems in terms of capacity,” he explained. “The major underwriting centers remain Lloyd’s and the London market, the US, Europe – specifically France, Germany and Switzerland – and to a lesser extent Japan.”
He also stressed that there has been “a great deal of consolidation in the satellite market and as such we have seen the emergence of three large general satellite operators which control around half of the world market and then the specialist operations who are smaller and have niche expertise.”
The new package will provide competitive guaranteed premium rates for all satellites Eutelsat deploys in the next three years. It will also provide flexibility in terms of launch vehicles, allowing Eutelsat the use of most of the commercially available heavy rockets.
The first satellite launched under the package will be the Hot Bird 9 satellite, which is currently scheduled for launch onboard an Ariane 5 rocket in the third quarter of 2008.
Lacombe also explained that the satellite insurance market was one that has adapted quickly to change. “The big three costs for satellite operators is the cost of the satellite itself, the costs of the launcher and the costs of the insurance. We have not seen a great deal of change in the costs of the satellites, but we have seen the cost of the launchers nearly double in the past three years. At the same time the cost of insurance cover has reduced considerably.”
Source: Lloyd’s and Willis – www.willis.com
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