OneWeb secures $1 billion insurance deal for remaining constellation
TAMPA, Fla. — OneWeb has signed an insurance policy worth more than $1 billion to cover the remaining 10 launches for its broadband constellation, after its previous policy expired following delays caused by its 2020 bankruptcy.
A previous multi-launch policy arranged by insurance broker Willis expired Aug.1, OneWeb confirmed, and rival broker Marsh won the tender for the remaining 56% of its 648-strong constellation after it was put out to the market.
“OneWeb is embarking on its next phase of growth as it looks to complete its constellation and deliver commercial service by the end of the year, and this agreement provides an added layer of security as our company moves quickly toward realising this goal,” OneWeb deputy chief financial officer Steven Fay said in the Sept. 2 announcement.
Massimiliano Ladovaz, OneWeb’s chief technology officer, added that it is set to begin its next launch campaign “later this week” with Arianespace at Baikonur, Kazakhstan. A Soyuz is slated to launch 34 satellites Sept. 14 to give OneWeb 322 in low Earth orbit.
The Marsh and Willis multi-launch policies are fairly similar to each other despite rising insurance costs in recent years, according to an insurance source.
OneWeb is said to have secured coverage for less than half the 5-6% going rate for insuring a Soyuz launch in the current market.
The cost to insure a single Soyuz launch when the first policy was put in place would have been around 2.25%, added the source, and its older package deal likely had a rate of less than 2%.
Launch insurance rates have shot up considerably in recent years following a string of launch failures, including issues involving Soyuz.
OneWeb’s first insurance policy did not account for a pause in its launch campaign when the operator fell into bankruptcy protection March 2020, after the pandemic complicated its fundraising plans.
The startup emerged from bankruptcy under new ownership in November, and resumed its launch campaign the following month. It has since raised $2.7 billion in equity from an international mix of investors, $300 million more than it said it needed to fund its initial satellite deployment.
Arianespace’s nine launches so far for OneWeb on Soyuz have gone up without a hitch.
Notably, OneWeb’s insurance only covers the launch flight phase of the constellation’s deployment, and does not include a year of in-orbit coverage that is typical for larger, geostationary (GEO) satellites.
OneWeb’s decision to continue insuring its LEO launches bodes well for the wider space insurance market, which has seen income decline amid a shift away from GEO satellites that have historically pulled in the majority of its revenues.
SpaceX, for example, has decided it has enough redundancy in plans for the thousands of satellites in its LEO Starlink constellation, and so is not seeking insurance coverage for these launches. SpaceX has so far launched more than 1,700 Starlink satellites.
However, Telesat, which envisages nearly 300 satellites for its LEO broadband network Lightspeed, is in talks about risk management with insurers.
Total space insurance market premium came in at around $452 million for 2020, according to data from insurance company AXA XL.
Although insurers paid about $431 million in claims for 2020, the market still recorded another loss-making year after salaries and other expenses.
Both 2019 and 2018 were marked by significant losses for the space insurance market.