Last week, an executive of space insurance company confirmed that due to recent claims the rate of insurance is increasing at an exponential rate, due to which few insurers are reconsidering their market place. During World Satellite Business Week presentation which took place at Euroconsult Dominique Rora stated that claims weren’t only the underlying problem but declining premiums bring great loss for industry during 2018–2019.
Dominique Rora stated that the industry has recorded high claims which have surfaced during preceding months, but they are within the norms. He further made it clear that decreasing premium trend has great influence in such cases.
Several launch failures were included in claims viz. Vega rocket’s failure in July while it was carrying Falcon Eye-1 which is an imaging satellite of UAE, the claim cost around $415 million, which is also considered as largest claim being made till date. Back in January WordView-4 failed, it was owned by Maxar Technologies. As a result $183 million was claimed by the company.
Due to those incidences, it is obvious that the trend of declining premium rates will come to an end. During 2003 the launch rates of satellites increased by 20%, which during 2018 showcased a decrease of 5%. Rora said that during the starting of 2019 rates were flattened and after the claims made in summer there has been a sudden spike in the rates.
The uncertainty has direct links with the departure of insurers from market. It is highly likely that most of the companies could exit space insurance sector. According to Rora, there are many companies which at present are planning strategies and premium levels which they should ask for their services. Rora continued by stating that market consensus states that premium level which space insurance companies are facing is half to what it is supposed to be.