WASHINGTON — Despite satellite malfunctions which can be expected to steer to major insurance claims, the space insurance field is taking a cautious approach to servicing technologies which may have the opportunity to repair such spacecraft.
In a chat on the Global Satellite Servicing Forum Oct. 12, Mark Quinn, chief executive of WTW Global Inspace, an area insurance broker, acknowledged that several high-profile satellite malfunctions and other incidents will result a significant loss for the sector in 2023.
“It’s the worst market we’ve been in within the last 20 years,” he said. “Within the last six months there’s been about $1 billion in claims against about $500 million in premiums.”
Those claims will likely include two malfunctions of recently launched satellites. ViaSat-3 Americas, also referred to as ViaSat-3 F1, encountered an issue deploying its large antenna that can reduce the available capability on that broadband satellite by greater than 90%. Viasat reported a separate problem with the facility subsystem with the Inmarsat-6 F2 satellite in August that raised questions on its ability to operate. A complete lack of ViaSat-3 F1 could end in a $420 million insurance claim, while Inmarsat-6 F2 could end in a $350 million claim.
Those and other claims, akin to satellites with malfunctioning electric propulsion systems, are creating what Quinn called a “market correction” for space insurance. The heavy losses in 2023 come after seven years of “very mediocre results” with little profit for insurers.
“When this bad 12 months is available in, it causes the underwriters to take a look at the portfolio of all of the business they write,” he said. “When they give the impression of being at space, they’re reassessing how they’re going to approach this class of business when it comes to how much capital they’re going to commit, what kinds of risk they’re going to underwrite and what premium rates they’re going to charge.”
Quinn spoke at a conference organized by CONFERS, an industry group promoting development of standards and best practices for satellite servicing and related applications. Some in the sector have argued that satellite servicing could, in the long run, help reduce insurance claims, with insurers themselves potential customers of those services.
He suggested the space insurance field would take a cautious approach to satellite servicing given the shortage of technical maturity and experience within the industry. Insurers, he noted, are on the lookout for in-flight demonstrations and other flight-proven technologies, which he acknowledged shouldn’t be at all times possible.
“With the intention to unlock significant capability on latest projects of very high value — latest applications with hardware that really hasn’t flown in orbit — we want to determine a option to get insurers comfortable that something that’s flying goes to work reliably the primary time in order that they are willing to commit their capability at an inexpensive price with the coverage that’s required,” he said.
Getting insurers comfortable with satellite servicing, he said, will probably be a long-term process. “They secret is a multi-year, multi-touch process where you engage the insurance community, bring them in as a real partner,” he said, in order that they understand each the technology and the business opportunity.
As for whether insurers can be customers of satellite servicing, Quinn said it’s possible sooner or later. “It must be available, it must be reliable and it also must be cost effective,” he said of satellite servicing. “It must cost lower than the choice.”
Insurers, he added, could also be open to eventually offering discounts on insurance policies for satellites designed to be more easily serviced. “The short answer is yes, but not at once,” he said, due to concerns in regards to the effectiveness and price of satellite servicing. “I do see that as something that might occur down the road.”