In the near term, volatility in launch insurance and in-orbit coverage will continue as satellite manufacturers and launch services providers struggle to improve their fleets of satellites and rockets. This could help drive down the cost of insurance to more acceptable levels.

“Losses will continue in the satellite sector,” said Christopher Kundstadter, executive vice president at U.S. Aviation Underwriters. “The underlying satellite market will continue to be fragile and volatility in the insurance market is not going away, it is increasing.” Kundstadter made his remarks at a panel session during the SATELLITE 2003 show.

Mark Quinn, senior vice president at Willis Inspace, said that there are a number of trends impacting the space insurance market currently, including: changing policy period durations; altering coverages and exclusions; and declining market capacity to insure.

Jean Michel Eid, managing director of Aon Space, told the audience that he believes the top trends driving the insurance market today are the changing capacity of the insurance industry to write policies due to markedly increased claims (at last count, $400 million and rising); hardening policy terms; in-orbit delivery issues; and, most importantly, swapping out reliable technology for new and unproved technology.

“Why do we always change proven technology?” Eid asked. “It is tough to rate the new technology when the older versions are performing so well.”