In the face of rising space insurance premiums (up at least 15 percent), Aon announced that it has “worked with Inmarsat to maintain pre-increase pricing for the successful launch of its I-4F3 satellite on board a Proton rocket.”
Aon noted that according to its “Space Market Review,” there is a “potential in the market for operators with strong risk profiles to avoid market volatility through well-informed strategic buying.
“Space insurers earned approximately $411 million in premium for the first two quarters of 2008, putting the market in a profitable position with claims reported to be $252 million,” Aon continued. “However, five additional in-orbit failures mean insurers will perceive market volatility persisting through the end of the year. 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 rumored to be now at 25 percent, sufficient to trigger a claim.”
Peter Elson, senior managing director of Aon Space, commented: “The market stiffened its resolve for premium rate increases following losses at the end of 2007 and early 2008. Some operators, such as Inmarsat and other Aon clients, took advantage of favorable 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.”
The F3 satellite is the third of the I-4 constellation, concluding a decade of development and a $1.5 billion investment. Nick Palmer, head of risk management at Inmarsat stated: “We consider risk management in all its aspects as being one of Inmarsat’s core capabilities and the launch insurance program developed over a number of years in partnership with Aon has been a valuable investment.”
Aon noted that the “world’s shipping, oil exploration, defense and aviation industries rely on Inmarsat satellites to service their communications needs. Inmarsat is also the communications channel of choice for the media when reporting from the world’s danger zones and for NGOs, government agencies and the United Nations when coordinating rescue efforts. The Proton Breeze M is one of the few launch vehicles capable of lifting the I-4 satellite, which is the size of a London double-decker bus and weighs six tons.
“London based Inmarsat stayed with the Proton rocket for its return to flight after a previous failure led to the total loss of another operator’s satellite, AMC 14, and needed to reassure the insurance market that this would be an acceptable risk. Aon was heavily involved in the technical process, assisting with advice and dissemination of information on all aspects of the mission, showcasing Inmarsat’s outstanding engineering capability. This conveyed to the underwriters the operator’s confidence in a smooth launch, which helped maintain favorable rates and coverage.”
Source: Aon – www.aon.com
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