International Space Brokers
International Space Brokers
International Space Brokers
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Bengaluru <strong>Space</strong> Expo 201027 th August
ISB Overview● Part of Aon – the world’s largest global insurance broker● Formed in 1991 with offices in all major insurance centres;Washington, DC; London; Paris● Strategic satellite offices in New York; Madrid; Brisbane● Leading market share of 38% (+/-)● Low employee turnover – consistency and institutional memory● Experienced “team” structure to benefit our customers● Quality and depth of in-house technical expertise● Insurance marketing approach customised to the riskINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 2
ISB ClientsINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 3
<strong>Space</strong> Applications●●<strong>Space</strong> is now an integral and far reaching part ofeveryday life for most people on the planet providinginfrastructure for:● Television● Communications● Navigation● Disaster Monitoring● Meteorology / Climatology● Planetary Science / Astronomy● Civil / MilitaryWithin India the industry is thriving, contributing aroundRs. 10 billion per annum to the Indian economy aloneINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 4
<strong>Space</strong> Applications: NavigationINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 5
<strong>Space</strong> Applications: Meteorology/Disaster MonitoringINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 6
<strong>Space</strong> Applications: AstronomyINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 7
<strong>Space</strong> Applications: <strong>Space</strong> TourismINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 8
Types of Insurance CoveragePropertyLiabilityManufacturing Transit Pre-Launch(Launch Campaign)All RiskGeneralLiabilityLaunch Post-Separation In Orbit LifeIn OrbitPre-Launch Policy Launch Policy PolicyThird Party LiabilitySatellite Launch & In OrbitThird Party LiabilityINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 9
<strong>Space</strong> Insurance Market●●●Facts●●Current market capacity for launchand early orbit operations isapproximately USD 588,500,000actual and USD 785,500,000theoreticalThe space insurance marketremains volatile, driven anddirected by few, but severe lossesCurrent Status: Declining rates forLaunch & In-orbitTypically insure 25 (circa) launcheseach year (commercial)In-orbit insured satellite fleet iscurrently an estimated total insuredvalue of $17.5 billionINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 11
40%L+1 yr. Rate (%)30%20%10%Insurance Market PerformanceLaunch Capacity and Rate Trends$1.5$1.0Theoretical CapacityMaximum RateTypical L+180/365 RateMinimum Rate$0.50%$0.0Capacity USD Billions1986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010As of August 2010YearINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 13
A Topical Risk Management Issue: <strong>Space</strong> Debris● No definition of space debris in <strong>International</strong> <strong>Space</strong> Law● <strong>Space</strong> debris includes:● Objects or fragments of objects both in-orbit and re-entering to earth● Debris from launchers and stages which either explode, do notreach orbit or re-enter to earth● Debris from satellites that return through air-space to earth● Identification of space debris is difficult but possible● in-orbit detection threshold is currently 10 cm● Third party liability claim can be successfully filed if identification ispossible● In case of in-orbit collision a third-party is entitled to file a claimagainst any or all of the responsible launching StatesINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 14
<strong>Space</strong> Debris● Risk of collision is growingg● Especially in LEO (mostEO spacecraft)● Kessler syndrome effect● Satellite Operators need toimplement collisionavoidance measures● In-orbit Liability damagesto Third Parties due tonon-standard conduct orcare● Satellite Operators need toprocure more space liabilityinsuranceSource: XL Aerospace, WSRF 2010INTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 15
Risk Management for Emerging Markets● Balance Sheet Protection● R&D● Business Plan Verification● Contract Risk Mitigation● Examine Financial Covenants in case of delay● Possible funding options - PE, Debt, Export Credit, Bonds, IPOwhat is best for the project?● Funding option elements - Business Plan, Cash Flow, ROI -ROA models, SecurityINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 16
The Future● Over the next 10 years (2009-2018) the total launch market isexpected to be divided 65% government/ 35% commercial● Among the government programmes the majority involvecivilian satellites● Government business therefore remains a key market forsatellite manufacturers and launch service providers, and Antrix/ ISRO is certainly one of the most active in this fieldINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 17
In Conclusion“We have forty million reasons for failure,but not a single excuse”Rudyard KiplingINTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 18
INTERNATIONAL SPACE BROKERS | CONFIDENTIAL AND PROPRIETARY 19
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