Ad­di­tional risks

RISKSA Magazine - - Short -Term -

So­lar flares from the sun pro­duce ge­o­mag­netic storms (such as the North­ern Lights), which can dis­rupt com­mu­ni­ca­tion trans­mis­sions of satel­lites. While mod­ern satel­lites are de­signed to with­stand so­lar flares up to a cer­tain point, about 40 satel­lites are be­lieved to have suf­fered crit­i­cal or cat­a­strophic mal­func­tions as a di­rect re­sult of ge­o­mag­netic storms. How­ever, the re­port states that it is of­ten dif­fi­cult to at­tribute a prob­lem to this type of ra­di­a­tion event, rather than to a flaw else­where in the sys­tem. “The risks as­so­ci­ated with so­lar flares are closely mon­i­tored, since they could af­fect sev­eral satel­lites at the same time. How­ever, the prob­a­bil­ity of a ma­jor so­lar flure erupt­ing, such as the one in 1859, re­mains low,” says Col­liot. Through­out their life­span, satel­lites need to be able to with­stand harsh en­vi­ron­ments, says Col­liot. Mod­ern satel­lites have to deal with con­di­tions that in­clude so­lar ra­di­a­tion, ex­treme tem­per­a­ture changes, pres­sure, and or­bital drift. The re­port notes that the launch phase is per­haps one of the most danger­ous times for a satel­lite be­cause the car­rier rock­ets that launch the satel­lite into or­bit sub­ject the satel­lite to huge vari­a­tions in tem­per­a­ture and pres­sure. Not to men­tion the risks of an un­suc­cess­ful launch, i.e. the rock­ets ex­plod­ing or fail­ing shortly af­ter lift- off. “Once in or­bit, satel­lites and their in­ter­nal sub­sys­tems are ex­posed to tem­per­a­ture ex­tremes. Ex­po­sure to the sun varies and de­pends on the satel­lite’s ori­en­ta­tion in ref­er­ence to the sun. Also, the prox­im­ity of heat-sen­si­tive com­po­nents to satel­lite parts that gen­er­ate high tem­per­a­tures plays a crit­i­cal role,” the re­port states. Satel­lites, par­tic­u­larly those in LEO, are ex­posed to per­pet­ual ex­pan­sion and con­trac­tion of the at­mos­phere, caused by tem­per­a­ture vari­a­tion linked to the so­lar cy­cle, the re­port notes. Dur­ing pe­ri­ods of the great­est so­lar ac­tiv­ity, the at­mos­phere ex­pands and reaches higher al­ti­tudes, which has a brak­ing ef­fect on the satel­lite and could push it off course – lead­ing to a need of more fuel and com­plex ma­neu­vers.

In­sur­ing for the outer lim­its

It is clear that space is not the vast vac­uum that we per­ceive it to be, at least not in Earth’s or­bit. Con­sid­er­ing the tech­no­log­i­cal level and the ex­ten­sive fi­nan­cial ef­fort that it takes to put a satel­lite into or­bit and main­tain its op­er­a­tion dur­ing its life span, in­sur­ance is es­sen­tial. The costs in­volved, should any­thing hap­pen, are im­mense. Not only is the loss quan­ti­fied by the value of the satel­lite it­self, but busi­ness in­ter­rup­tion as well, par­tic­u­larly in sit­u­a­tions of tremen­dous public at­ten­tion, such as broad­casts of ma­jor sport­ing events, in­ter­rup­tions such as th­ese could prove fi­nan­cially and rep­u­ta­tion­ally dis­as­trous for TV broad­cast­ers and com­mu­ni­ca­tion ser­vices. Ac­cord­ing to the Al­lianz re­port, the av­er­age in­sured satel­lite in LEO has a value of $40 mil­lion and an op­er­a­tion life­span of five years. In GEO, where most of the com­mer­cial tele­com mis­sions op­er­ate, the satel­lites are worth an av­er­age of $200 mil­lion and are in op­er­a­tion for up to 15 years. “When a con­tract is taken out, the satel­lite and the ser­vices it will de­liver are stud­ied in

Pre-launch in­sur­ance: Mu­nich Re Pre-launch in­sur­ance pro­vides all-risks cov­er­age while the satel­lite is be­ing trans­ported to the launch pad, while it is be­ing at­tached to the launch ve­hi­cle (the rocket), as well as for the con­fig­u­ra­tions and stor­age lead­ing up to the launch it­self. Al­lianz pro­vides ad­di­tional cov­er­age dur­ing the man­u­fac­tur­ing and testing phase prior to the trans­porta­tion of the satel­lite – as­sem­bly, in­te­gra­tion and test cov­er­age (AIT).

In-or­bit in­sur­ance: de­tail, in­clud­ing the abil­ity of its transpon­ders to pro­vide the nec­es­sary geo­graphic cov­er­age, its built-in re­dun­dan­cies to cope with com­po­nent fail­ures, and the var­i­ous fail­ure mode analy­ses. Should an in­ci­dent oc­cur that re­duces the satel­lite’s op­er­a­tion ca­pac­ity, in­sur­ance li­a­bil­ity is as­sessed in pro­por­tion to the demon­strated level of loss,” the re­port states. Typ­i­cally, satel­lites are in­sured against dam­age un­der ‘all risks ex­cept’ type of poli­cies, and the in­sur­ance is di­vided into three parts, with each form of cover re­flect­ing the var­i­ous stages of a satel­lite’s life: pre-launch, launch, and in-or­bit in­sur­ance.

Launch in­sur­ance: The launch of a satel­lite is per­haps the riski­est stage. The rocket needs to pro­pel the satel­lite at 11 kilo­me­ters a sec­ond in or­der to break away from Earth’s grav­ity and in­sert into or­bit. Launch in­sur­ance cov­ers this phase. Mu­nich Re’s launch in­sur­ance also cov­ers the satel­lite’s first year of op­er­a­tion. If the satel­lite is only par­tially op­er­a­tional, or if the ser­vice life is short­ened as a re­sult of the launch, it will be con­sid­ered a par­tial loss. In-or­bit in­sur­ance protects against the satel­lite’s com­plete or par­tial fail­ure dur­ing its op­er­a­tional life­span in or­bit. Ac­cord­ing to Mu­nich Re, the sum agreed upon at the start of the satel­lites life cov­ers the to­tal cost of man­u­fac­tur­ing and launch­ing a re­place­ment satel­lite into or­bit. How­ever, Mu­nich Re re­cently launched a new satel­lite cover they re­fer to as end-of-life in­sur­ance that be­gins with the launch and ends with end of the satel­lite’s ser­vice life, or af­ter 15 years. What makes this cover dif­fer­ent is that even if the satel­lite’s tech­ni­cal con­di­tion changes there will be no ad­just­ments made to the con­di­tions of in­sur­ance. Con­versely, in-or­bit in­sur­ance is typ­i­cally re­newed an­nu­ally af­ter the satel­lite’s tech­ni­cal con­di­tion is re­assessed, and sub­se­quent ad­just­ments to the ex­tent of the cover and price are made. As tech­nol­ogy makes the mys­ter­ies of our so­lar sys­tem ever-more ac­ces­si­ble, the sky is clearly not the limit for the scope and in­no­va­tion pos­si­ble for in­sur­ance of­fer­ings. Ac­cord­ing to Mu­nich Re, it is crit­i­cal for prod­uct providers to evolve with th­ese new-world risks to en­sure con­tin­ued rel­e­vance and max­imised op­por­tu­nity into a far-chang­ing fu­ture.

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