Sat Premiums Low Despite Massive Market Losses

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Massive insurance claims from natural and man-made disasters in the past three years have not pushed up satellite insurance rates. In fact, the opposite is true, according to insurance underwriters.

Even as losses have mounted from major catastrophes, rates for satellites have dropped. According to space brokers at Marsh, a standard telecommunications satellite from an established manufacturer launched aboard a European Ariane 5, a Russian Proton or a Chinese Long March rocket — with the launch plus the satellite valued at about $250 million — would pay a premium of between 8 and 9 percent of the insured value for a one-year policy.

Lower rates are possible if the owner wants coverage only until the satellite separates from the rocket, or if the coverage period is less than a year.

At 8 percent, rates have dropped by nearly 50 percent in the past five years or so despite the fact that global insurance underwriters have paid out billions in claims for floods, storms, industrial accidents and other catastrophes.

The reason, underwriters say, is that insurance companies have sought to diversify their risk exposure and have sought shelter in relatively small insurance niches, including satellites, that have been profitable during the past few years.