Page 41 - Insurance Times October 2023

underwriters and "follow the fortunes" of the underwriters, computer modeling to arrive at premium rates, although
referred to as "following-on." data for calculations is limited. Another aspect of satellite
insurance is the procedure attached to salvage. Though it
There are four essential phases / types of is impossible to obtain monetary value from the wreckage
satellite insurance: in the event of an actual total loss or constructive total loss,
many insurers rely on sharing any revenue which may be
Pre-launch insurance, specifically property and cargo
obtainable from the failed satellite with the insured.
insurance, covers satellites and rockets prior to launch.
Pre-launch insurance usually covers risks associated with
transportation of the satellite from the manufacturing 6. Insurance Regulation:
facility to the launch site, assembly on the launch pad, Rules of satellite launch technology is governed by
inspection, and pre-lift-off activities. The period of International Traffic in Arms Regulation (ITAR) in the United
coverage ends with the intentional ignition or lift-off of States. This regulation states that the details of any
the rocket. technology provided to insurance underwriters are subject
to strict rules and are provided to selected insurers only. This
Launch insurance is the most common type of space
is an important consideration as the structure and
satellite insurance. It may extend from six months to
one year after the launch. Coverage commences where technology used on launch vehicles is similar to missile
pre-launch insurance ends. Launch insurance terminates technology for weapons. Failure to comply with ITAR rules
when the satellite separates from the rocket and could result in heavy fines and imprisonment. In cases where
completes an initial operational phase of functionality reinsurance coverage is arranged, re-insurers who provide
testing. The launch period may last approximately 20 such coverage have to rely on very detailed information -
to 30minutes. scanty information will not support the treaty.
In-orbit insurance commences after the satellite has
As with launch insurance, the insured value is an agreed
completed its initial operational phase of functionality
value, which at the beginning of the satellite's service life is
testing, and normal operations in space begin. The life
based on the replacement value. The sum covers the whole
expectancy of a satellite is approximately 10 years and
value of a satellite.
ends when the satellite's fuel cells deplete. In-orbit
insurance usually consists of one-year renewable
Meanwhile, of the 590 satellites in GEO and 280 in medium
policies. In order for the insurance companies to renew
Earth orbit, highly elliptical and other orbits, 238 are insured
the In-Orbit insurance, they require 'health reports'
for a total of $24.7 billion.
from the insured regarding the condition of the
satellites. Based on these reports they accept renewed
AXA XL is a leading insurer in the space insurance industry.
coverage.
They work closely with their clients and brokers around the
Third-party liability space insurance covers legal liability world to develop innovative, specialized products covering
arising from damage to a third party during the launch
all types of spacecraft and launch vehicles through
or the in-orbit operations of a satellite program. A
development. Led by renowned space insurance experts,
variety of coverage options are available: personal
AXA XL also offers a unique and comprehensive suite of
injury, property damage, damage to Government space satellite insurance products including pre-launch,
Authorities launch facilities, loss of revenue, service
launch, whilst in-orbit, and liability coverage for spacecraft
interruption, and material changes to ground stations.
and launch vehicles.
5. Underwriting Perceptions:
7. New India Assurance Company is the
When considering the premium rating structure for satellite
insurance coverage, during the early days of insurance, pioneer in India:
many insurers based their rating according to the launch India has launched around 80 satellites until now, and one
vehicle. For example, if the launch vehicle being used had a name that has been associated with the space programme
one in ten failure rate, the insurance premium would be ten throughout has been 'New India'. It was the pioneer of
per cent of the gross cost. Today, insurers use statistics and satellite insurance in India and is still the main underwriter

The Insurance Times October 2023 39