RMWG OutbriefOctober 11, 2007
Chris KunstadterVice President
XL Insurance(+1) 212-321-6510
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Agenda
The state of the space insurance industry
RMWG Topics
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Recent Issues in Space Insurance
Third-Party (Liability) Insurance Impact of Proton failure Chinese ASAT test
First-Party (Physical Damage) Insurance Losses in 2007 exceed premium Delays in Sea Launch and Proton launches
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Proton Launch Failure in Kazakhstan
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Recent Debris Events in LEO
www.st-suunnittelu.fi/romu/
www.centerforspace.com
Chinese ASAT Test, 11 Jan.
Proton Aux Motor Explosion, 14 Feb.Breeze-M Explosion, 19 Feb.
Estimated debris >5-10 cm from Jan & Feb 2007 breakup events:
FY-1C (Jan 11): >2,200 piecesBeidou 2A (Feb 2): 100 piecesProton Aux Motor (Feb 14): 60 piecesCBERS 1 (Feb 18): 24 piecesBriz-M stage (Feb 19): 1,000 pieces
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Profitability
Relaxed UnderwritingFlight to Quality
Inadequate Reserves
Increased Capacity
Seek Market Share
Inadequate Rates
Mounting Losses
Profits Rise
Rates Increase
Capacity Decrease
Insolvencies/Withdrawals
The Insurance Market Cycle
Rates Decrease
Hard Market
Soft Market
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Insured Launches
0
25
50
75
100
125
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
LEO & other satellites
GEO satellites
Insured launches
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Market Exposure In Orbit
$0
$5
$10
$15
$20
$25
Jan-97Jan-98Jan-99Jan-00Jan-01Jan-02Jan-03Jan-04Jan-05Jan-06Jan-07
($ b
illi
on
s)
0
50
100
150
200
250
Un
it c
ou
nt
Insured LEO and other Satellites
Insured GEO Satellites
Market Aggregate Exposure
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0%
5%
10%
15%
Launch Vehicle Failure RatesCurrent GEO launch vehicles*
* Current GEO launch vehicles included in this survey are: Ariane 5, Atlas 5, Delta 4, H-2A, Long March 3A/B/C, Proton M/Breeze M, Soyuz Fregat & Soyuz 2, Zenit 3/SL
Ave
rag
e
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0.0%
2.5%
5.0%
7.5%
10.0%
Satellite Failure RatesCommercial communications satellites1st year (i.e., “post-separation/IOT” phase)By manufacturer*, since 1997
Ave
rag
e
* Major “Western” manufacturers of commercial communications satellites included in this survey are AAS, Antrix, Astrium, Boeing, LM, Loral, Orbital
15.8%
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0%
1%
2%
3%
Satellite Failure RatesCommercial communications satellites2nd & subsequent years (i.e., “in-orbit” phase)By manufacturer*, since 1997
Ave
rag
e
* Major “Western” manufacturers of commercial communications satellites included in this survey are AAS, Antrix, Astrium, Boeing, LM, Loral, Orbital
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Split of Claims Between Launch and In-Orbit Phases
0%
25%
50%
75%
100%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total
Launch Vehicle Losses Satellite Losses
38%
62%
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Annual Premiums and Losses
-$1,500,000,000
-$1,000,000,000
-$500,000,000
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Earned premium (net of brokerage)
Incurred losses (paid and potential outstanding)
Net result since 1998
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Total Cumulative Return for Space Insurance Market(since 1998)
-100%
-75%
-50%
-25%
0%
25%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
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RMWG Topics
Commercial human spaceflight task force Subgroup of RMWG Brainstorming and developing agenda for topics to be
brought to the full RMWG Specifically looking at human spaceflight issues Ongoing effort
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Topics for further study
Requirements and availability of insurance for personal space flight
FAA safety regulation of human space flight Inter-party waivers of liability State-based legislative initiatives MPL calculation methodologies Definition of third parties under concurrent
operations Application of industry standards