Last Thursday’s launch of two giant satellites by an Arianespace rocket was a success in more ways than one. The launch saw a flawless deployment of two important satellites, including Eutelsat 172B and the massive ViaSat-2 craft for broadband-by-satellite operator ViaSat of Carlsberg, California, and the heaviest-ever satellite (at 6,418 kgs) built by Boeing.
The Eutelsat satellite was insured for $241 million (€214.2m), and the ViaSat-2 insured for a thumping $545 million, and a report in trade mag Space Intel Report suggests that had the launch failed, this $545 million might not have been sufficient to re-build the ViaSat craft, such was its complexity.
The insurance sector gets to keep the premiums paid for the cover which as well as the actual launch might have included payments for the first 30-60 days following launch, or beyond, to include pre-launch problems, failure in orbit, and damage to other satellites should a catastrophe occur while in orbit.
But while the premiums are attractive to the insurance underwriters (just think how many house or auto premiums have to be sold to match the $786 million of cover on this particular launch), the competition for business is tough, and risky. For example, a specialist conference last October heard that the pre-launch catastrophe on September 1st 2016 when a SpaceX rocket blew up when still on the ground and whilst carrying a Israeli satellite cost the insurance sector a repayment of $200 million to cover the lost satellite alone. This, said experts at the conference, was enough to wipe out 20 years of insurance premiums on pre-launch coverage.
John Munro, who heads up space projects for insurance giant Marsh, said that the entire pre-launch insurance market only generates $10-$12 million a year. The remaining fees, covering the actual launch and first-year in orbit, cost around 4-5 per cent of the value of the satellite, depending on the rocket launch provider. Arianespace launch cover is around the 4 per cent mark, with SpaceX just a little higher, and Russia’s Proton system at the higher (5 per cent) end.