A US$175 million insurance claim has been filed for the ‘total loss’ of the SkyTerra-1 communications satellite, after its 22 m diameter main mesh antenna developed a fault, Seradata understands. No details have been released by its owner, Ligado Networks (formerly LightSquared), whose satellite is operated by Telesat. As the spacecraft still has some use, the claim is presumably for a ‘constructive total loss’.
The size of the claim is surprising given SkyTerra-1’s age. The spacecraft, launched in November 2010, is close to its 15-year minimum design life and therefore should, in theory, have significantly depreciated in value. At the time of its launch, SkyTerra-1 had an insured value of US$268 million, while its original estimated value was about US$306 million (made up of its construction and launch costs), according to Slingshot Aerospace’s Seradata launch and spacecraft database. Using simple straight-line depreciation, the asset should be worth less than 10 per cent of that today, prior to its fault.
Artist’s impression of SkyTerra-1 with its 22 m antenna unfurled. Courtesy: Ligardo Networks
The insurance market is having a torrid time. SkyTerra-1’s US$175 million claim adds to a US$472 million claim made earlier this year for four O3b mPower satellites, which have an electrical issue, and a likely claim for US$218 million for a radar antenna issue on a pair of Sarah-Passive radar satellites. If these and the SkyTerra-1 claims are accepted, 2024 is certain to be a losing year as the total of gross premiums for the year (before broker deductions) are expected to be about US$600 million. Last year was also a dismal one for the space insurance market with gross premiums of just under US$600 million easily overcome by a claims/loss total of US$995 million.
Comment by David Todd:Seradata notes that SkyTerra-1 had difficulties in deploying the antenna at the start of its life: there was a technical delay in deployment but, until now, it was believed to be operating successfully. It is not known if this contributed to its current condition. The antenna was originally made by Harris Corporation (now L3 Harris) while the spacecraft was produced using a Boeing built BSS-702HP-GEM bus/platform.
SkyTerra-1’s current claim of US$175 million suggests it has been insured at a value way above its likely asset value (see calculation above). In other words, whatever happens with this claim, someone appears to have sold the underwriters a pup.
Post script:A US-Indian insurance firm is dipping its toe into space insurance waters, or at least into Third Party cover. Tata AIG, a joint venture between Tata Group and American International Group (AIG), has started to provide satellite in-orbit third-party liability insurance covering bodily injury and property damage.
