Space insurance officials, already out of sorts because of persistent low insurance premiums, worry that commercial and government satellite operators are leaving their satellites in orbit and active far beyond their design lives, raising the risk of sudden failures. They urged operators to act — retiring satellites at the end of their service lives — before regulators feel the need to get involved. Credit: Beazley

TOKYO — Space insurance underwriters on Oct. 12 said recent in-orbit failure of several aging satellites is a signal that satellite owners need to be more prudent in retiring their assets rather than keeping them in service beyond their scheduled retirement dates.

They said both government and commercial fleet operators need to act voluntarily or face the threat of regulatory restrictions on their activities if more such failures occur.

Up to now, the recent in-orbit failures have occurred on U.S. government-owned spacecraft that did not carry insurance, and on commercial satellites that, because of their age, were no longer insured. The exception is the Telkom-1 satellite owned by Indonesia’s PT Telkom, which despite its age carried a small insurance policy.

The silence of the U.S. Defense Department on any policy changes following the failure of three Defense Meteorological Satellite Program (DMSP) satellites in orbit has not gone unnoticed among space insurers, even though the U.S. government does not typically insure its satellites. If the U.S. military, which has invested heavily in space safety and space traffic management, does not act to take risky satellites out of service, why should commercial companies, with a direct financial interest in longer satellite lives, do differently?

Denis Bensoussan of space insurance underwriter Beazley, said operators need to think about more than their short-term interests.

“In the auto industry and especially in the aircraft industry there are obligatory checks, a D-check for aircraft for high-level maintenance,” Bensoussan said. “There is no such thing in the satellite industry. But industry needs to act responsibly. It’s a classic tragedy of the commons.”

While several of the failures have occurred on old Lockheed Martin satellites, to date there has been no public evidence pointing to a common cause of the failures.

Satellite manufacturers are reluctant to disclose failures and in some cases are bound by contract with their customers not to publicize anomalies. Satellite operators remain silent out of fear that disclosing issues will undermine their commercial position in competitive markets.

And not all have had the same consequence. Telkom-1 satellite apparently suffered a partial breakup and is now considered a total failure, forever to drift along the geostationary arc. The AMC-9 satellite, in contrast, has apparently experienced some kind of outgassing or debris-producing event accompanying a failure. But owner SES and builder Thales Alenia Space have said they are confident of being able to put the satellite into a graveyard orbit above the geostationary arc.

Fred Ho, a director at AsiaSat, which has satellites in the neighborhood of Telkom-1, said PT Telkom has done a good job of keeping neighboring operators — particularly those to the west of Telkom-1 — apprised of the satellite’s movements.

Insurance officials conceded that their industry is in no position to dictate terms to satellite operators. Established underwriters for years have said premiums have dropped too far to assure a stable market in the event of a major failure.

Coming soon: A further extension of satellite lives

But some of the same underwriters that criticize operators for leaving older satellites in service too long are now lining up to provide coverage for satellite-servicing businesses being prepared by SSL MDA and Orbital ATK.

Orbital’s launch of its Mission Extension Vehicle has already placed its launch-plus-one-year insurance policy as it readies for a late-2018 launch aboard an International Launch Services Proton rocket.

These and other satellite-servicing models seek to add several years of life to satellites that old and out of fuel but otherwise in good health.

Stephane Rives, deputy chief space underwriting officer at SCOR Global P&C, said the coverage obtained so far does not cover the full mission, which includes docking with a satellite and providing it with fuel.

Rives said insurers remain concerned that a satellite on its last legs may be refueled, increasing the risk of catastrophic failure and pollution of the geostationary-orbit arc 36,000 kilometers over the equator, where most telecommunications satellites operate.

Bensoussan said there must be a way for satellite owners to perform checks on a satellite’s health before agreeing to refuel it. Today’s geostationary-orbit satellites are generally designed to last for 15 years in orbit. A large percentage of them are operated for years longer, sometimes in inclined orbit to save fuel.

“If you want it to be serviced, you should make sure it is healthy enough to operate for another X number of years,” Bensoussan said. He did not specify how that might be done, especially since in the recent crop of commercial satellite failures, the owners were as surprised as everyone else.

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Peter B. de Selding
Peter B. de Selding
Peter de Selding is a Co-Founder and editor for SpaceIntelReport.com. He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes