Transcript Diapositiva 1 - Pagnanelli RS

16TH ECSL SUMMER COURSE ON SPACE LAW AND POLICY
September 3rd-14th, 2007
Noordwijk, Wednesday 12th, 15 :30-16 :45
Lecture on :
Risk management and insurance practices
Dr Benito PAGNANELLI
Managing Director
1
SPACE RISKS
• Catastrophic nature
• Little value of statistics
• Technical evaluation case by case
• Risk management
• Reliability and level of confidence
TECHNOLOGY EVOLUTION
• LAUNCHERS:
- Single satellite launch: Thor Delta, etc..
- Multiple satellite launches: Proton, Atlas, Ariane 5, etc...
- Space shuttle satellite launch (reusable)
- Space shuttle as such not insured
• SPACECRAFT:
- from 15-18 kgs weight to 600-700
- ISS: International Space Station
2
SATELLITES UTILIZATION
• Military: not insured
• Scientific/civil: sometimes insured
• Commercial: mostly insured
SPACE INSURANCE EVOLUTION
• Evolution from 1965: Intelsat I (Early Bird) insurance
• The insurance market
• Brokers, insurers, reinsurers
• Insurance capacity
• Volatility
• Insurance premium pricing: just a gamble ?
• Period of insurance
• Launch and in-orbit multi-annual policies (health status evaluation)
•Market insured satellites launched, claims, loss ratio statistics:
3
Market Insured Satellites Launched
125
100
LEO & other satellites
GEO satellites
Insured launches
75
50
25
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
4
Market Exposures vs. Capacity
$1,500,000,000
75
125
100
$1,000,000,000
50
LEO & other satellites
GEO satellites
Insured launches
75
$500,000,000
25
50
25
$0
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
0
1994
1995
1996
Theoretical Maximum Market Capacity
1997
1998
1999
2000
2001
2002
Maximum Market Insured Launch Value
Insured Launches (right scale)
2003
2004
2005
2006
5
Market Capacity - 2007
Source: Broker statistics for Launch Placements
Asia
US
Europe
UK
• $540,000,000
• 28 companies
• No single market has more than 10% share
6
Split of Failures by Phase of Mission
Launch plus first year in orbit, since 2000
Commercial communications satellites
Remainder Of
First Year
19%
Launch Vehicle Flight
39%
First Month In Orbit
42%
7
Space Insurance Market Losses
Launch Vehicle vs. Satellite
100%
63%
75%
50%
37%
25%
0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Launch Vehicle Losses
Satellite Losses
Total
8
Space Insurance Market Premium and Losses
$2,000,000,000
Earned premium (net of brokerage)
Incurred losses (paid and potential outstanding)
Net result since 1998
$1,500,000,000
$1,000,000,000
$500,000,000
$0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
-$500,000,000
-$1,000,000,000
-$1,500,000,000
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Space Insurance Market Profit Margin
Cumulative since 1998
25%
0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
-25%
-50%
Profit margin over ten years:
5%
-75%
-100%
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SATELLITE INSURANCE, MAIN RISKS CONVENTIONAL SEGMENTATION
• MATERIAL DAMAGE AND LOSS OF REVENUE:
- Pre-launch phase
- Launch phase
- In-orbit (life) phase
- Performance incentives
- Launch delay
- Re-launch guarantee by manufacturers and launch operators
• THIRD PARTY LIABILITIES:
- Pre-launch, launch and in-orbit phases
- Launch operators and state protection schemes (ESA, NASA,
etc...)
- Joint assureds
• OTHER RISKS:
- Product liability
- Contractual liabilities
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POLICY WORDINGS
• Pre-launch
• Launch
• In-orbit
• Performance
• Third
incentives
party liability
• Etc..
MAIN CHARACTERISTICS OF POLICY WORDINGS
• Pre-launch insurance: property and transport traditional language
•Space launch insurance: innovative
• Satellite
• Third
in-orbit life insurance: innovative
party liability insurance:
- pragmatic solutions solve difficult legal issues on responsibility
- joint assureds
- no subrogation among operators
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SOME LEGAL ISSUES
• Treaties and conventions on third party liability: state and/or private
responsibilities
• Proposed space protocol to the Convention on International Interest
in Mobile Equipment (by Unidroit)
• ITAR (Internationl Traffic in Arms Regulations)
• Claims handling
• Litigation
• Partial loss and total loss
• Definition of loss (total or partial), insuring agreement, salvage,
subrogation, additional insured and loss payee, due diligence,
misrepresentation
• Arbitration
• CCC (Claims Coordination Committee)
13
SPACE TOURISM
•
Space tourism evolution
•
Aviation or Space legal-insurance regime?
•
USA: Federal Aviation Administration (FAA) regulates space tourism activities under a space related regime (Act
HR5382, effective date Feb. 13th, 2007).
Main features:
– Launch liability insurance policy must cover all launch participants and a reciprocal waiver of claims
subrogation is mandatory.
– Required insurance is statutorily capped by a known formula, the maximum probable loss («MPL»), for
1. third party bodily injury or property damage (not to exceed $ 500 million often ranging $ 150 million)
and
2. damage to Government property (not to exceed $100 million) for each launch.
3. Above these amounts, the Government endeavours to pay claims above the required limit of
insurance up to $ 1.5 billion. In excess of the Government contribution, insurance should then apply
again.
4. Under the liability insurance policy of the licenced operator the following entities must be insured
(joint assureds)
»
»
»
»
Launch licensee
Government and its Agencies and sub-contractors
Contractors and sub-contractors of the customer
Customer related entities with financial interest
continues
14
Continued
• Need for new international legislation to facilitate development
• By year 2015, 15.000 tourists expected(?)
• First fatal accident already occurred on the ground
INTERNATIONAL INSURANCE BODIES
• International Union of Aerospace Insurers (I.U.A.I.)
• Space Risks Study Group (SRSG) (I.U.A.I.)
• Policy Certification Initiative (PCI) (I.U.A.I.)
• Claims Coordination Committee (CCC)
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