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Chapter 12 Marine and aviation reinsurance 12/23 Chapter

Having made the decision to participate in a satellite risk, the underwriter must ensure that the policy 12
Policy terms and
provisions are fair and reasonable, providing the reinsured with the coverage they need. Due to the conditions are highly
individual nature of the satellites themselves, policy terms and conditions are also highly specific specific to risk
to risk.
Accumulations
Since certain launch vehicles have the capacity to launch more than one satellite, the underwriter must
keep up to date records of the accumulated participations on a given launch. For various reasons, a
launch manifest can change and the underwriter may find that two satellites that have already been
underwritten may, unexpectedly, be due for launch together and the total participation over the two
might exceed the maximum permitted or maximum desired participation. In such circumstances, the
prudent underwriter will arrange facultative reinsurance to return the total participation on the launch in
question to an appropriate level.

Example 12.6
In February 2009, the reinsurance implications of catastrophic collisions in space occupied the thoughts of satellite
reinsurers when, for the first time since space flight started in 1957, two satellites collided in orbit. Over that time
some 6,000 satellites have been launched and around 3,500 to 4,000 are still in orbit. Some have disintegrated while
others have exploded.
The collision involved an Iridium 33 communications satellite, and a Kosmos 2251 satellite, the latter being the
property of the Russian Space Forces. Both were destroyed. The incident created an expanding cloud of debris that
is now orbiting around Earth, posing a risk to other orbital vehicles. The incident has increased the risk management
problems related to satellite insurance, although in this case neither satellite was insured.

Suitable types of reinsurance
Reinsurance protection can be arranged on a proportional basis, catastrophe excess of loss, as well as
facultative cover for one-off risks.
Reinforce
Make a note of the key learning points for satellite reinsurance. Compare them to the published key points that follow
this section. Reference copy for CII Face to Face Training