Aon Space market review 2007 has revealed that space insurers are targeting premium increases of up to 30% following losses in 2007, which included the failures of the Sea Launch rocket carrying the NSS-8 satellite and the Proton carrying JCSat 11.
Now with another failure of the Proton rocket carrying the AMC-14 satellite, this spells a pivotal time for both the insurance market and operators after several years of reducing premiums.
The 2007 space insurance market, worth approximately $660 million in launch and in-orbit premium, saw the arrival of several new insurers which led to abundant capacity and falling premiums. The market was then sent into a state of flux in December when, on top of the launch failures, the Rascom 1 satellite suffered a helium leak resulting in its journey to final orbit with a reduced lifetime and a potential claim of $256 million to its insurers.
In total, claims are estimated to reach $835 million for 2007, prompting insurers to re-assess their premium rating and income targets for 2008. If insurers perceive 2007 and early 2008 as an indication of higher claims patterns to come, this could lead to tough negotiations over the coming months.
Peter Elson, senior managing director of Aon Space, said: To keep rates competitive going forward, operators will need to demonstrate their quality and reliability while insurers will be placing extra emphasis on good track records and commitment to quality control.