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Insurance for a launch is currently very expensive. My friends in the industry tell me that insuring a launch increases the cost by 50%.

by brd529 10y ago

Retric 10y ago
The wording on that is misleading, you insure the satellite AND launch and then measured things in terms of launch cost. Industry has ~95% success rate so insurance is limited to around 10% of total costs or basically nobody would use it. Further, insuring a 5% risk to a 200m satellite and a 100m launch vs a 200m satellite and a 50m launch at 10% failure rate would not be 2x because the payout is 50m less. Also, if the numbers get overly lopsided SpaceX would offer insurance for it's customers at close to the actual risk adjusted costs.
- Ntrails 10y ago
  Also, to be clear, in terms of reliability concerns vs your choice of launch provider the important thing is the marginal cost of insurance for company A vs company B. As you say, if the insurance market were utterly deliquent it's inevitable that SpaceX would resolve the issue but I very much doubt it is. I wonder if it's done through lloyds...
- valuearb 10y ago
  An Atlas V with the strap-on boosters is roughly equivalent to the Falcon 9 FT, it's about $150M (about $110M without the strap-ons). A brand new Falcon 9 non-reusable is around $65M? You have a $200M satellite. Insurance on a Falcon 9 launch is $20M, your costs now are $85M. Even forgoing insurance on the Atlas V can't bridge the gap, and SpaceX's launch cadence is getting so rapid that you should be able to launch much sooner too.
  - greglindahl 10y ago
    Insurance rates aren't 10%, they're closer to 5%: http://spacenews.com/space-insurers-warn-that-current-low-rates-are-not-sustainable/ http://spacenews.com/space-insurers-warn-that-current-low-ra... -- and note that 5% includes coverage of the 1st year of the satellite, and not just the launch. Also, using a "flight tested" Falcon 9 apparently does not significantly raise the insurance rate: http://www.floridatoday.com/story/tech/science/space/spacex/2017/03/28/ses-confident-spacex-rocket-can-deliver-second-time/99699862/ http://www.floridatoday.com/story/tech/science/space/spacex/... "In one measure of the mission’s perceived risk, Halliwell said that the insurance rates SES is paying “did not materially change” from a typical launch on a new rocket."
    - gozur88 10y ago
      I wouldn't expect it to, and over time the insurance cost for used boosters may even be less if it turns out there are more failures related to manufacturing defects than damage from previous flights. Though it's going to be awhile before we know one way or the other.

Insurance for a launch is currently very expensive. My friends in the industry tell me that insuring a launch increases the cost by 50%.

by brd529 10y ago

Insurance for a launch is currently very expensive. My friends in the industry tell me that insuring a launch increases the cost by 50%.

Retric 10y ago

The wording on that is misleading, you insure the satellite AND launch and then measured things in terms of launch cost. Industry has ~95% success rate so insurance is limited to around 10% of total costs or basically nobody would use it. Further, insuring a 5% risk to a 200m satellite and a 100m launch vs a 200m satellite and a 50m launch at 10% failure rate would not be 2x because the payout is 50m less. Also, if the numbers get overly lopsided SpaceX would offer insurance for it's customers at close to the actual risk adjusted costs.

Ntrails 10y ago
Also, to be clear, in terms of reliability concerns vs your choice of launch provider the important thing is the marginal cost of insurance for company A vs company B. As you say, if the insurance market were utterly deliquent it's inevitable that SpaceX would resolve the issue but I very much doubt it is. I wonder if it's done through lloyds...
valuearb 10y ago
An Atlas V with the strap-on boosters is roughly equivalent to the Falcon 9 FT, it's about $150M (about $110M without the strap-ons). A brand new Falcon 9 non-reusable is around $65M? You have a $200M satellite. Insurance on a Falcon 9 launch is $20M, your costs now are $85M. Even forgoing insurance on the Atlas V can't bridge the gap, and SpaceX's launch cadence is getting so rapid that you should be able to launch much sooner too.
- greglindahl 10y ago
  Insurance rates aren't 10%, they're closer to 5%: http://spacenews.com/space-insurers-warn-that-current-low-rates-are-not-sustainable/ http://spacenews.com/space-insurers-warn-that-current-low-ra... -- and note that 5% includes coverage of the 1st year of the satellite, and not just the launch. Also, using a "flight tested" Falcon 9 apparently does not significantly raise the insurance rate: http://www.floridatoday.com/story/tech/science/space/spacex/2017/03/28/ses-confident-spacex-rocket-can-deliver-second-time/99699862/ http://www.floridatoday.com/story/tech/science/space/spacex/... "In one measure of the mission’s perceived risk, Halliwell said that the insurance rates SES is paying “did not materially change” from a typical launch on a new rocket."
  - gozur88 10y ago
    I wouldn't expect it to, and over time the insurance cost for used boosters may even be less if it turns out there are more failures related to manufacturing defects than damage from previous flights. Though it's going to be awhile before we know one way or the other.