PARIS — The government of Bermuda is rushing to find an in-orbit satellite to fill an orbital slot before Bermuda’s rights to it expire in mid-2013, Bermuda’s minister of space affairs said.
The slot, at 96.2 degrees west, in principle became more valuable in 2011 when the Isle of Man, which like Bermuda is positioning itself to attract satellite companies, lost its right to an orbit slot next door when the deadline passed with no spacecraft present.
The Isle of Man orbital position was 96.5 degrees. With both jurisdictions scrambling to fill their positions, and only 32 Ku-band channels available at the two positions combined, prospective satellite operators viewed the risks of interference as a deterrent to investing.
Marc Bean, Bermuda’s minister for environment, planning and infrastructure strategy, said Bermuda government authorities view the position, which offers a good look angle on North America, as “one of our most valuable assets.”
In a July 23 interview, Bean said recent regulatory rulings would permit Bermuda to maintain access to the slot even if it placed a satellite there for just 90 days — for example, during the post-launch period when a satellite undergoes in-orbit testing.
“It is on the top of our priority list,” Bean said. “Our view is that this should be attractive to several operators.”
Bermuda, which prides itself as a place where taxes and government bureaucracy are kept to a minimum, views the space industry as a natural fit. Bermuda already is home to multiple large insurance companies. Bean said the government is working with Lloyd’s of London and other underwriters in an attempt to make the space insurance market more attractive to customers.
The current global commercial space insurance market is viewed as a relatively low-cost period in what is typically a cycle of low rates followed by losses, then higher rates and higher profitability that bring in new insurers that put downward pressure on premiums.
Nonetheless, a recent report by underwriter Allianz of Europe said that only 45 percent of the 370 active satellites in geostationary orbit are currently insured. In low Earth orbit, where government science and observation satellites are more numerous, only 21 of 400 functioning satellites are insured.
Insurers have expressed concerns that even as rates have dropped, several major commercial fleet operators have declined to enter the market. Some have purchased insurance only for the satellite’s launch and first year in orbit, preferring to self-insure after the first year.
Governments as a rule do not carry insurance on their spacecraft.
Allianz’s SpaceCo space insurance division wrote $111 million in coverage in 2011, making it one of the most active in the market. Allianz said the reduced pool of customers, especially those viewed as less risky, is a threat to an industry in which launch costs are increasing, Allianz said.
In 2011 space underwriters reported that total premium revenue was nearly $800 million, while losses from satellite or launch failures totaled $600 million.
Bean said one area where underwriters should consider changes to attract more satellite owners is in coverage length. Making it difficult to purchase coverage for more than a year at a time, he said, dissuades some customers from purchasing insurance.
Bean conceded that Bermuda’s plans to position itself to attract satellite and space companies were not helped a couple of years ago when Intelsat left the island in favor of establishing its legal headquarters in Luxembourg.
Luxembourg is another low-tax jurisdiction, but at the time it was not on the U.S. government’s “gray list” of jurisdictions whose tax policies were viewed as conducive to money laundering by terrorist or organized crime organizations.
Bermuda has since taken measures to remove itself from the gray list. Bean said the government is still in discussions with Intelsat and has not abandoned hope that the company, which is the world’s largest commercial fleet operator, will return.
The Organization for Economic Cooperation and Development in a May report said Bermuda, like Luxembourg, had “substantially implemented the internationally agreed tax standard.”
