MUMBAI -
With Allianz subsidiary SpaceCo upgrading its
satellite insurance business in India, an
Asia-Pacific market hungry for satellites can
expect yet another technical business service to
rocket upwards.
The global satellite
insurance market, which allows owners and
operators of satellites to protect themselves
financially against both launch disasters and
orbital mishaps, is estimated to be worth over
US$850 million, but that's only modestly touching
the tip of the iceberg. Just one company,
London-based International
Space Brokers, is expecting
to rake in $200 million to $300 million a year in
premiums for the next three years.
Satellite insurers are taking greater
notice of the Asia-Pacific region, particularly
India. "One insured satellite out of four to be
launched or to be launched by the end of 2006 will
be placed over the Asia-Pacific region,"
Pierre-Eric Lys, managing director of SpaceCo,
told Asia Times Online. "[The] Indian space
industry is opening to the international market.
Two recent examples of this growing cooperation
are the involvement of India in the Galileo
positioning system [and] the next generation of
[the] Eutelsat [European Telecommunications
Satellite] which will be partly manufactured and
integrated in India."
Besides, 206
satellite launches are scheduled for this year,
with over 50 in April alone, according to
information received by satellite communications
consultants Microcom Systems. The number is only
likely to increase, with the increasing use of
satellites for telecommunications, weather,
Internet services, mapping, agriculture,
transport, defense, environmental protection and
more.
"The satellite insurance market has
vast potential in Asia, with new users such as
telecommunication satellites owned by media
companies like Zee," Santosh Balan of Bajaj
Allianz told Asia Times Online from his head
office in Pune. "Only one-third of satellites
launched are presently insured." Due to the high
risks of satellite launches, the insurance bill
can be as high as one-fifth of the total cost of a
satellite, with satellite building costs ranging
from $200 million to $400 million depending on
size and other factors.
Also, although
there may be only a few hundred satellite owners,
there exists a limitless potential for insurance
coverage for satellite users, ranging from TV
companies to telecommunications firms. "Half of
the world's space product expenditure comes from
direct government investments through space
agencies and organizations," according to the
Dutch Space Consultancy & Insurance, a company
positioning itself as information providers to
satellite insurers.
"The other half comes
from private investments. In this market,
companies are forced to make business decisions
without a clear understanding of the priorities,
intentions and reliability of other involved
parties."
Insurers perceive a Asian
satellite market humming with activity. China will
launch nine satellites this year, according to the
China Aerospace Science and Technology
Corporation, with the first one - an experimental
satellite - to be launched towards the end of
April. This year, China is celebrating the 50th
anniversary of its space program.
India's
Indian Space Research Organization (ISRO), another
veteran in the Asian space business, has had
Spaceco insuring its satellites the past 16 years
for all phases of its space programs, including
the pre-launch, transport, launch pad, and
in-orbit maintenance phases.
ISRO has
already built nearly 25 satellites, and is
outsourcing the production of commercial
satellites. It wants private industry to outsource
production of commercial satellites in the next
three years, letting ISRO concentrate on research
and development activities. ISRO expects about 10
small to medium-sized satellites, ranging from 300
kilograms to 2,000 kilograms, to be outsourced in
the next five years.
This January, ISRO
signed its first joint export order through its
marketing arm ANTRIX and Germany's EADS Astrium to
make the W2M satellite (which will offer TV, data
and broadband transmission capabilities) for EADS
Europe. Bigger Indian corporate houses such as the
Tatas, Larsen & Toubro, Hindustan Aeronautics
Limited, Godrej and hundreds of smaller companies
are already suppliers of launch vehicle
components.
Insurers are covering all the
bases, with the global major International Space
Brokers offering "political risk" coverage for
Russia and China. Chinese insurers, too, are
expanding their horizons, for the first time
backing a satellite project designed and launched
abroad.
Eleven Chinese property insurers
offered a $12.4 million policy for the DMC+4
satellite launched last year from the Plasetsk
Cosmodrome in northern Russia. DMC+4 will be used
before and after the Olympic Games, for purposes
ranging from monitoring the progress of stadia
construction to tracking environmental changes and
traffic near venues.
China is also
expanding the Asian satellite family, with the
Chinese Space Administration (CNSA) gifting
satellite reception stations to seven Asia-Pacific
countries besides Thailand, Iran, Pakistan,
Bangladesh, Indonesia, Mongolia and Iran. "We hope
that more Asia-Pacific countries can benefit from
the digital video broadcasting satellite through
China's Fengyun series of meteorological
satellites for their meteorological research,
disaster mitigation, economic growth and
prosperity," head of the China Meteorological
Administration (CMA) Qin Dahe told the media.
Other issues are surfacing, with the
expansion of the insurance market. One British
insurer alleged that around 20 "technically
superior" satellite operators are paying
exorbitant insurance premiums that subsidize
lesser counterparts.
But the steady
increase in the importance of space-related
businesses is driving this emerging market. "Last
but not least, a growing number of Indian
companies are using space telecommunication means
for their daily business," points out Pierre-Eric
Lys. "In some cases, these links are so critical
that a signal interruption could lead to large
losses of incomes, client and image." Enter the
satellite insurer.
(Copyright 2006 Asia
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