Space Insurers to Prepare for Potentially Disruptive Claims in the Market.
Viasat Inc. is facing significant challenges with more than $1 billion worth of orbiting satellites, leading space insurers to prepare for potentially disruptive claims in the market.
The ViaSat-3 Americas satellite, valued at roughly $1 billion, encountered an unexpected problem during the deployment of its antenna in orbit in April. If Viasat declares it a total loss, industry experts estimate that the resulting insurance claim could be a record-breaking $420 million. Such a claim could make it harder and costlier for other satellite operators to secure insurance coverage.
Due to the substantial financial risk associated with insuring such high-value satellites, it's likely that ViaSat-3 is covered by multiple policies from various insurance companies. The involvement of multiple insurers is a common practice to mitigate risk.
Viasat's Inmarsat-6 F2 satellite, launched in February, also suffered a power problem, which could result in a $350 million insurance claim.
While major telecommunication companies seek insurance coverage for their multimillion-dollar satellites, operators focusing on launching batches of smaller satellites into low-Earth orbit, such as SpaceX, are less likely to prioritize insurance coverage for individual satellites.
Viasat's recent satellite troubles have raised concerns among investors. The company's shares experienced a significant drop following announcements of satellite issues, impacting growth projections.
Insurers expect that if the claims for these satellite losses are substantial, it could lead to higher premiums for satellite insurance coverage. This could result in a more cautious approach from insurers and increased costs for satellite operators.
The satellite insurance market faces challenges due to a smaller pool of providers following the exit of major insurers in recent years. The market is stable but not necessarily growing, despite the dynamic growth of the space industry.
The increasing number of active satellites in orbit, including mega-constellations like SpaceX's Starlink, has led to concerns about potential collisions in space. As more small satellites are launched into low-Earth orbit, the demand for satellite insurance has decreased, especially for companies deploying batches of smaller satellites.
Overall, the challenges faced by Viasat and the potential impact on the satellite insurance market highlight the complex dynamics of insuring high-value assets in the space industry.
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