Munich Re launches new satellite insurance cover
Munich Re offers commercial satellite operators a new insurance solution covering a satellite's entire service life.
Munich. The insurance, which is referred to as end-of-life cover, commences with a satellite's launch and terminates at the end of its scheduled service life, or after 15 years at most. What is new, besides the cover period of up to 15 years, is that during the term of insurance no adjustment is made to the conditions of insurance, even if the satellite's technical condition has changed. Thomas Blunck, whose responsibilities on Munich Re's Board of Management include space business: "Our new end-of-life cover gives clients planning security with regard to their insurance costs and scope of cover for the satellite's entire useful life." Most satellites are funded by long-term debt. The availability of insurance cover plays a decisive role in whether a satellite project can be financed and at what cost. "Our product therefore provides clients with clear added value", said Blunck.
A satellite usually has an asset value in the range of US$ 200–400m and a service life of 15 years in orbit. The insurance covers this value, i.e. the cost of acquisition, launch, financing and insurance. The limit of indemnity for an individual satellite, and thus the indemnity payable in the event of loss, decreases over a satellite's lifetime, in line with its depreciation in value. Worldwide, some 25 commercial satellites are launched every year.
Up to now, standard covers have comprised launch insurance, which commences with a satellite's launching and has a term of up to one year, followed by in-orbit insurance, which as a rule is renewed annually. Prior to renewal, the satellite's technical condition is verified and any adjustments to the scope of cover and/or price are made.
Munich Re has an extensive database on satellite launches and in-orbit risks during the past 50 years. This enables Munich Re to assess risks well and offer lifetime insurance cover for satellites with a technology that has proved reliable over an extended period of time.
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.