India’s entry into the troubled space insurance market
India’s entry into the troubled space insurance market
India’s entry into the troubled space insurance market: According to the latest news, Indian insurance specialist TATA AIG is going to expand its presence in space, and the reason behind this is that the global market is continuously facing huge losses. TATA AIG had said in its statement on May 13 that it has decided to provide satellite in-orbit third-party liability insurance to cover bodily injury and property damage based on the quality and expertise of the 22-year-old company in the aviation market. Have started.
Introduction of Satellite-Based Coverage by TATA AIG
Let us tell you that Sushant Sarin, President of Commercial Business of TATA AIG, a joint venture between TATA Group with more than 8 thousand 750 employees and American International Group (AIG), an insurance company based in America, says that it will provide satellite-based coverage in India. Has become the first private insurer company to do so.
Meeting the Needs of the Indian Space Sector
Elaborating further, Sarin said that this innovative product will meet the growing needs of satellite manufacturers and operators in the Indian space sector and will also alert potential threats to orbiting spacecraft, especially given the recent solar storm. We are confident that this will inspire Indian satellite companies to work with more confidence than before and contribute to the country’s space aspirations.
Collaboration with International Reinsurers
Deepak Kumar, Senior Executive Vice President of the company, says that – TATA AIG will also work with reinsurers internationally to reduce the risk. TATA AIG subsequently plans to provide first-party property damage coverage for satellites and launch vehicles during pre-launch, launch, and in-orbit operations. Deepak Kumar, who also heads reinsurance, credit, and aviation insurance at Tata AIG Group, said around 189 startups are developing space-related businesses in India.
Rising Claims and Insurance Rates in the Space Sector
According to Dubai-based underwriter Alseco, space-insurance claims worth $2 billion have been reported in about 20 incidents over the past 12 months, representing about 10% of the estimated $23 billion value of all insured assets in orbit. Most of these incidents occurred in 2023, a challenging year for the insurance market that has raised questions about its ability to cover future risks. The power issues are one of the most high-profile claims following the failure of Viasat-3 and the first four SES O3b mpower satellites.
Impact of Increased Space Activity on Insurance Rates
Alseco President and CEO Laurent Lemaire says that insurance rates for some space risks have increased by 100% in the last 3 months of 2023 compared to the same period in 2022. Rates continue to rise as nearly $1 billion in claims have been received since the beginning of 2024. Explaining this further, he said that after declining over the past few decades, rates are projected to be about 37% lower than at the end of 2002.
Explaining this further, he said that with the increase in space activity, the demand for insurance also increases, which leads to higher income and makes the market more sustainable than before. He further explained how India is relaxing foreign investment rules, among other ways, to get a bigger share in the global space economy, which is currently set to be around 2%.
Also Read: Houston’s powerful storm increases the possibility of insurance claims.
