Another woe for space insurers: US$175 million claim made for SkyTerra-1’s faulty antenna

by | May 13, 2024 | Reliability Info, Satellites, Seradata News, Space Insurance

Seradata understands that an insurance claim for US$175 million has been filed for ‘total loss’ –  the SkyTerra-1 communications satellite after its 22 m diameter main mess antenna developed a fault.  No details have been released by its owner Ligado Networks (formerly LightSquared) whose satellite is operated on its behalf by Telesat.  The claim is presumed to be for ‘constructive total loss’ as there is some reported use left in the spacecraft . The antenna was originally made by Harris Corporation – now L3 Harris. The spacecraft was built using a Boeing built BSS-702HP-GEM bus/platform.  While there was a technical delay in the deployment of the antenna, until now it is believed to have been operating successfully.

Artist’s impression of SkyTerra-1 with its 22 m antenna unfurled. Courtesy: Ligardo Networks

The size of the claim is surprising given the age of the SkyTerra-1 spacecraft  was launched in November 2010, making its age close to its 15 year minimum design life, and thus should have been very much depreciated in value. Slingshot Aerospace’s Seradata launch and spacecraft database has its original estimated value for SkyTerra 1 at circa US$306 million made up of a combination of its construction and launch costs but by now, using a simplistic straight line depreciation, this asset (before its fault) should really be worth less than 10 percent of that.

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 SkyTerra-1 claims are accepted then 2024 is certain to be a losing year as the total of gross premiums for the year (before broker deductions) are expected to be circa US$600 million.

Last year was also a losing one for the space insurance market with gross premiums of just under US$600 million million easily being usurped by a claims/loss total of US$995 million.

Comment by David Todd:  Seradata notes that SkyTerra-1 had earlier difficulties deploying its antenna at the start of its life. It is not known if this is significant to its current condition.  At the time SkyTerra-1 had an insured value of US$268 million.  Whether compared to this, or to Seradata’s estimated initial US$306 million value, the current claim of US$175 million makes it look as if that SkyTerra-1 may not have had its value properly depreciated by insurance underwriters. 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 begun providing satellite in-orbit third-party liability insurance covering bodily injury and property damage.

 

 

 

 

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