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There's only one month left. If it can pass with no major catastrophic rocket failures, the space insurance sector will look back on a fantastic -- and profitable -- 2009. Insurance for this market can be a tough business, as failures are frequent, and the cost to launch can reach (or even exceed) $250 million. So, it's not always easy to eke out a profit.
Aon (AOC) International Space Brokers forecasts space insurance sector profits of above $400 million this year, making it another strong annual performance for this line. The space carriers have sustained losses of $400 million to $450 million in 2009, but premiums paid to the insurers exceeded $800 million for the first three quarters of the year.
According to Clive Smith, who leads the space unit for Aon, "Demand for satellite communication capacity continues to grow, from delivering broadband and television to surveying the earth for pollution, resources and disaster monitoring." He noted, "The recession made it more difficult for some operators and particularly new projects to raise capital but nevertheless there are a number of interesting projects that are still progressing well. The health of the insurance industry means it's well positioned to support satellite programs by providing sufficient capacity to satisfy investor requirements."
Five major launches were completed over the past three months, generating $154.6 million in insurance premiums.
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