Space Debris and Insurers: Challenges or Complacency? Philip Chrystal, Senior Claims Expert, Swiss Re, Zurich

Transcription

1 Space Debris and Insurers: Challenges or Complacency? Philip Chrystal, Senior Claims Expert, Swiss Re, Zurich

2 Orbital debris population 1960 Cataloged objects >10 cm diameter Space Debris and Insurers Challenge or Complacency? London 2 July

3 Orbital debris population 2010 Cataloged objects >10 cm diameter Space Debris and Insurers Challenge or Complacency? London 2 July

4 Catalogued debris (>10cm) man-made space objects. objects populate LEO. are operational satellites. objects are uncontrolled. Space Debris and Insurers Challenge or Complacency? London 2 July

5 What's covered? LAUNCH POST-SEPARATION (IN- ORBIT TESTING) IN-ORBIT OPERATIONS Space Debris and Insurers Challenge or Complacency? London 2 July 2013 Page 5

6 Launch + 1 Year In-orbit = "3 in 1 Cover" 1 Year Launch Post Sep In-Orbit < 1 day 1-6 months 6-11 months Space Debris and Insurers Challenge or Complacency? London 2 July 2013 Page 6

7 Different orbits, different worlds Number of insured satellites 21 LEO GEO 167 Space Debris and Insurers Challenge or Complacency? London 2 July

8 Different orbits, different worlds Total value of insured satellites by orbit (USD billions) 1.0 LEO GEO 18.3 Space Debris and Insurers Challenge or Complacency? London 2 July

9 Distribution of insured values in GEO Space Debris and Insurers Challenge or Complacency? London 2 July

10 Annual probability of collision (catalogued object with a station-kept satellite at centre of a GEO-potential well) Space Debris and Insurers Challenge or Complacency? London 2 July

11 Swiss Re's involvement by raising awareness Publication can be ordered via or available as download (PDF) from: Space Debris and Insurers Challenge or Complacency? London 2 July 2013 Page 11

12 Poll results from Swiss Re's Space Debris Conference, March 2011 Space Debris and Insurers Challenge or Complacency? London 2 July

13 "Is space debris a major concern for future space operations?" start of conference 6% 16% 31% Yes, a major concern It's a manageable risk It's a very remote risk Only a concern in LEO but not in GEO 47% Space Debris and Insurers Challenge or Complacency? London 2 July

14 "Is space debris a major concern for future space operations?" end of conference 6% 20% 31% Yes, a major concern It's a manageable risk It's a very remote risk Only a concern in LEO but not in GEO 43% Space Debris and Insurers Challenge or Complacency? London 2 July

15 "Should insurers have a major role in mitigation?" 10% 12% No, regulator's job 18% No, industry's job 67% Yes, in a supporting role Yes, insurers should drive the process Space Debris and Insurers Challenge or Complacency? London 2 July

16 What role should insurers take in response to the challenge of space debris? "On their own, insurers cannot respond to the challenge space debris poses to their insured operators. The more logical and pragmatic approach is for insurers to work with operators in promoting mitigation efforts." Mitigation measures are: Minimise the release of mission-related debris. Prevent spent rocket bodies from exploding. Remove satellites from LEO or GEO orbits at end-of-life. Improve design of new launch vehicles. Support of Space Data Association (SDA - Space Debris and Insurers Challenge or Complacency? London 2 July

17 "Does the current legal environment adequately addresses the issue of liability arising out of a collision?" 18% 14% Yes No Don't know 68% Space Debris and Insurers Challenge or Complacency? London 2 July

18 This is because insurance has been and continues to be a reactive industry 1. Claims by millions of US workers exposed to asbestos, over decades, brought many insurance companies to their knees as increasingly large damages were awarded to plaintiffs by American courts. To counteract accumulation losses, the insurance market introduced an asbestos exclusion clause (LSW 2488). 2. Post 9/11, the airline insurance market introduced limited cover for 3rd party liability (from 1.5 billion down to 50m USD). Following this, a separate market was spawned, offering the difference in cover for this peril. Space Debris and Insurers Challenge or Complacency? London 2 July

19 A growing problem Number of catalogued objects in Earth orbit by object type Iridium/Cosmos collision FengYun 1C event Space Debris and Insurers Challenge or Complacency? London 2 July

20 Insurance coverage (1) Conventional satellite property insurance covers damage to or destruction of an insured satellite. Protects the owner or operator of the impacted satellite (typically from launch to end of life) All risks insured broad enough to cover "accidental loss or damage" from any form of space debris Collision must occur during policy period Damage must meet the pre-defined loss criteria Agreed value policies Waivers of subrogation should not prevent recovery to the extent a liable third party can be identified, and it can be established that said party is at fault. Space Debris and Insurers Challenge or Complacency? London 2 July

21 Insurance coverage (2) Third-party liability insurance Covers or addresses liability of the satellite owner/operator whose satellite or debris is considered responsible for the impact or collision For death, bodily injury or property damage or loss resulting from an activity carried out under a license, caused on earth, in the air and in space Mandatory procurement for Launch phase in some states (US, France, etc.) Optional in-orbit (debris impact, collision between two satellites) with some exceptions UK satellite providers required to secure TPL insurance for GBP 100m, adding the UK government as an insured party US GEO satellite operators in LEO planning to re-enter their satellites at end of life Limited in terms of duration Hold harmless agreements will certain recovery actions (e.g. satellite owner vs. launch service provider) Space Debris and Insurers Challenge or Complacency? London 2 July

22 Probability of collision in LEO In sun-synchronous orbit within LEO, the annual probability of collision of a 1cm size debris with a 10m2 satellite is >0.8%. Space Debris and Insurers Challenge or Complacency? London 2 July

23 To conclude for insurers is in GEO, where debris risk is remote. induced failures pre-occupy us most. attitudes will change dramatically following a catastrophic debris induced collision in either orbit Space Debris and Insurers Challenge or Complacency? London 2 July

24 Thank you