space insurance primer

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO 1

Space Insurance Update Part I

2 November 2016 Christopher T.W. Kunstadter

XL Catlin

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

Agenda

2

Part I

Commercial Space Market

Part II

Space Insurance Metrics

Space Insurance Losses

Conclusion

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

0

25

50

75

100Non-GEOGEO

Launches To Orbit

3

GEO market has been flat for many years

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

0

25

50

75

100OTHER MISC

OTHER US

OTHER RUSSIAN

OTHER JAPAN

OTHER CHINA

ZENIT

VEGA

SOYUZ

PSLV

PROTON

LONG MARCH

H-IIA/B

GSLV

FALCON

DELTA

ATLAS

ARIANE

Launch Capture Shares of all orbital launches, by vehicle

4

Launch Year

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Satellites Launched

5

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GEO Satellite Capture By manufacturer

6

Year Launched

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0

2,500

5,000

7,500

Separated Mass vs. Launch Date All GEO satellites

7

Sep

ara

ted

Mass (

kg

)

Launch Date

“Ariane lower gap” →

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

0

5,000

10,000

15,000

Payload Power vs. Launch Date All GEO satellites

8

Paylo

ad

Po

wer

(W)

Launch Date

20 kW+ payloads

anticipated by 2019

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

0

1

2

3

4

Payload Power vs. Separated Mass Commercial GEO satellites

9

Paylo

ad

Po

wer

÷ S

ep

ara

ted

Mass

Launch Date

EP drives this ratio up →

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

New Space Industry Reality Check Adapted from Tauri Group presentation

10

Proposed systems largely viewed as technically credible Mix of business experience, from global entrepreneurs to technologists

Meaningful investment to date, with potential for more

Capacity drivers are mobility, IFC, streaming, interactive, IoT >70% of IP traffic is video, expected to be 82% by 2020

Global IP traffic will increase nearly 3x over next 5 years

Wireless and mobile devices will account for 2/3rds of total IP traffic by 2020

Many business cases not proven Uncertain demand and revenue potential, and limited market analysis

Many new companies chasing coat-tails of industry leaders

Major challenges Massive magnitude of investment

Long timelines

Complex technologies

Supply chain stress

New launch vehicles

Smaller satellites = less redundancy, less testing

Geopolitical, legal, regulatory, and economic issues abound

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

New Launch Vehicles

11

Within the next five years, all

of the world’s major launch

vehicles will be replaced…

…in addition to numerous

new launch vehicles

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A Launcher Market Scenario…

12

Launch capacity is currently constrained by

production, launch sites, etc.

Number of proposed satellite systems has increased

significantly, most based on small satellites ⬆⬆⬆⬆

Number of satellites actually launched will increase somewhat,

as many systems will never come to fruition ⬆⬆⬆

Number of launches will increase slightly with

increase in small satellites to be launched ⬆⬆

Mass to orbit (kg) will increase slightly ⬆

$/kg launch cost will reduce with new launch vehicles ⬇

Launch revenue will decline, due to lower $/kg and

launcher competition ⬇⬇

Profitability among launch providers will suffer ⬇⬇⬇

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

Gartner Hype Cycle

13

Technology

trigger

Peak of

inflated

expectations

Trough of

disillusionment

Slope of

enlightenment

Plateau of

productivity

…but you can fall

off at any time

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO

Where Does This Leave Us?

14

Do you recognize anyone?

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But There Is Hope…

15

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Space Insurance Update Part II

4 November 2016 Christopher T.W. Kunstadter

XL Catlin

© 2016 XL Catlin companies. All rights reserved. | MAKE YOUR WORLD GO 17

Space for new ideas… …new ideas for space

Christopher T.W. Kunstadter

Senior Vice President and

Global Underwriting Manager - Space

XL Catlin

+1 212-915-6387

chris.kunstadter@xlcatlin.com