INDIA’S RECENT LANDING ON MOON & RELATED TIDBITS OF SATELLITE INSURANCE

1. Prologue:

The Lander Module (LM) of the Indian Space Research Organization’s (ISRO) third lunar mission Chandrayaan-3, launched on July 14, made a successfully landing on the Moon’s surface on August 23, making India only the fourth country after the erstwhile USSR, the U.S. and China to make a soft landing on the lunar surface. We, all the Indians were feeling very excited at that moment. All Indians shouted when Chandrayaan-3 landed. It was a very proud moment of our country’s extra-ordinary achievement – when several people danced to drum beats and chanted slogans. We felthighly proud of our country. We saw how the Vikram Lander touched the Moon. It was an emotional moment for all of us, People in several parts of the country also held special prayers at temples, mosques and gurdwaras since the early hours of that day, for the successful landing, while several schools remained open for a few extra hours to enable students to watch the historic moment there. Now that excitement is over. The Indian Space Research Organization (ISRO) had already completed restoring the requisite communication with Chandrayaan-3’s Vikram Lander and Pragyan Rover after the two were put to be landed there and started monitoring to collect information on the moon and sending those to all of us.

Earlier Chandrayaan-1, India’s first mission to Moon, was launched successfully on October 22, 2008 from SDSC SHAR, Sriharikota. The spacecraft continued orbiting around the Moon at a height of 100 km from the lunar surface for chemical, mineralogical and photo-geologic mapping of the Moon.

Subsequently, the next venture Chandrayaan-2 was supposed to hover above the intended landing site in order to make a soft vertical descent at ‘walking pace’ conveniently. However, the Lander crashed, or made a hard landing, on the Moon’s surface because of its high velocity. Former ISRO Chairman K Sivan has revealed that a small error during the Chandrayaan-2 mission in 2019 led to its failure. However, he expressed satisfaction that the error was identified and corrected, finally resulted to the successful landing of the Chandrayaan-3 lander on the lunar South Pole.

What is the importance of these Chandrayaan launching by ISRO?

India launched the Chandrayaan-3 mission to the Moon because it wants to learn more about our mysterious neighbor in the sky. Imagine the Moon as a big, rocky playground in outer space, and we the Earthlings want to discover all its secrets.

The benefits that may be derived out of the sending satellites to moon may be mainly the Technological Advancement – Chandrayaan-3 will contribute, to technological advancements in various sectors, including space research, engineering, and communication. The mission will drive innovation and foster the development of new technologies, which can be used in other industries. The successful soft-landing of Indian Space Research Organization’s (ISRO) Chandrayaan-3 mission made India the first country to land near the South Pole on the Moon. This Chandrayaan-3 mission comprises of the Vikram Lander and Pragyan Rover, both of which conducted in-situ experiments on the Moon’s surface. Indian stocks in the market that gained on Chandrayaan-3 success include Linde India, Centrum Electronics, Avantel, Larsen & Turbo, BHEL, BEL, Paras Defence, etc. After landing of Chandrayaan-3 latest news: These 13 stocks have added over 20,000 Crores market cap in first one week after landing. After landing, both Lander ‘Vikram’ and Rover ‘Pragyan’ have to do the most important work of the mission. After landing, Rover Pragyaan had gone out of the belly of Vikram and had already ongoing its moonwalk. Let us first tell you about the importance of landing of both the lander and the rover. India’s private space-tech sector, already thriving, receives a substantial boost from Chandrayaan-3. The successful mission fosters investor confidence and encourages increased investment in space technology, driving further innovation and growth. Experts believe Chandrayaan-3 will accelerate India’s self-reliance in emerging sectors and boost its confidence. Satellite Chandrayaan-3 is a classic lesson on focused perseverance, economic innovation and sovereignty in new and emerging technical fields.

For the Chandrayaan-3 mission, ISRO had given an estimate of cost of around just Rs 613 Crores ($74 million).ISRO scientists said three factors make their missions cost-effective: Indigenization, ingenuity, affordable manpower. Centum Electronics, HAL, Paras Defense and Space Technologies, and Walchandnagar Industries have contributed to the construction of Chandrayaan-3. Indian steel companies Tata Steel and Jindal Stainless played key roles in the success of the Chandrayaan-3 lunar mission, which landed on the Moon’s South Pole. Tata Steel said its crane technology helped in assembling the Fat-LVM3-M4 rocket.

2. Indian Space Policy 2023:

This year, the Indian Space Research Organization (ISRO) released the Indian Space Policy 2023 that had been in the works for some years.The policy has been welcomed as a progression towards India’s entry in a New Space age. However, it needs to be followed up with suitable legislation, accompanied by clear rules and regulations.

Until the early 1990s, India’s space industry and space economy were defined by ISRO. Private sector involvement was limited to building to ISRO designs and specifications.

The Indian Space Policy 2023 unveils the government’s plan to let private enterprises carry out end-to-end activities – from launching satellites and rockets into space to operating Earth stations.

What were India’s Past Quests to Reform in its Space Sector?

• The First Satellite Communication Policy:It was introduced in 1997, with guidelines for foreign direct investment (FDI) in the satellite industry that were further liberalized but never generated much enthusiasm.
• Remote Sensing Data Policy:It was introduced in 2001, which was amended in 2011; in 2016, it was replaced by a National Geospatial Policy that has been further liberalized in 2022.
• Draft Space Activities Bill:It was brought out in 2017, which went through a long consultative process and lapsed in 2019 with the outgoing Lok Sabha.
  • The government was expected to introduce a new Bill by 2021, but it appeared to have contented itself with the new policy statement released by ISRO.

Why there is a Need to Introduce Private Players into Space Sector?

• India lags far behind in Space Economy:The global space economy is currently valued at about USD 360 billion. Despite being one among a few spacefaring nations in the world, India accounts for only about 2% of the space economy.
• Harnessing the Full Potential of India’s Space Sector:Today, while ISRO’s budget is approximately USD1.6 billion, India’s space economy is over USD9.6 billion. Broadband, OTT and 5G promise a double-digit annual growth in satellite-based services.
  • It is estimated that with an enabling environment, the Indian space industry could grow to USD 60 billion by 2030,directly creating more than two lakh jobs.
• Private Sector has revolutionized the Space Sector:Companies like SpaceX, Blue Origin, Virgin Galactic have revolutionized the space sector by reducing costs and turnaround time while In India however, players within the private space industry have been limited to being vendors or suppliers to the government’s space program.
• Enhancing Security:The security and defense agencies spend nearly a billion dollars annually to procure earth observation data and imagery from foreign sources. This much reliance on foreign entities can put India’s security at stakes.
• Bringing Self-reliance in Space Sector:Today, more than half the transponders beaming TV signals into Indian homes are hosted on foreign satellites, resulting in an annual outflow of over half a billion dollars.
• Promoting Entrepreneurship in Space Sector:There is a need to promote private sector activity in all high technology areas including space, to fully unlock the potential of India’s youth and entrepreneurs.
  • To realize this vision, it is necessary to enable private entities within the Indian space sector to establish themselves as independent players capable of end-to-end space activities.
• Making Space Industry at par with Global Industry: Promoting the private sector will enable the Indian space program to remain cost competitive within the global space market, and thus create several jobs in the space and other related sectors.

What is in Indian Space Policy 2023?

Vision: The ‘Vision’ is to “enable, encourage and develop a flourishing commercial presence in space” that suggests an acceptance that the private sector is a critical stakeholder in the entire value chain of the space economy.

Key features of attractions:

• The policy creates four distinct, but related entities, that will facilitate greater private sector participation in activities that have usually been the traditional domain of the ISRO.
• IN-SPACe (Indian National Space Promotion and Authorization Centre): It will be a single window clearance and authorization agency for space launches, establishing launch pads, buying and selling satellites, and disseminating high-resolution data among other things.
  • It will also share technologies, products, processes and best practices with NGEs (non-government entities and this will include private companies) and government companies.
  • IN-SPACe will create a “stable and predictable regulatory framework” that will ensure a level playing field for the NGEs.
  • It will act as a promoter by setting up industry clusters and as the regulator, issue guidelines on liability issues.
• New Space India Limited (NSIL): It will be responsible for commercializing space technologies and platforms created through public expenditure, as well as, manufacturing, leasing, or procuring space components, technologies, platforms and other assets from the private or public sector.
• Department of Space: It will provide overall policy guidelines and be the nodal department for implementing space technologies and, among other things, co-ordinate international cooperation and coordination in the area of global space governance and programmes in consultation with the Ministry of External Affairs.
  • It will also create an appropriate mechanism to resolve disputes arising out of space activity.
• Rationalizing the role of ISRO:It states that ISRO will “transition out of the existing practice of being present in the manufacturing of operational space systems.
  • Hereafter, mature systems shall be transferred to industries for commercial usage. ISRO shall focus on R&D in advanced technology, proving newer systems and realization of space objects for meeting national prerogatives”.
  • ISRO will share technologies, products, processes and best practiceswith other government and non-government companies.
  • This will make ISRO use its all its strength on cutting edge research and development and long-term projectssuch as Chandrayaan and Gaganyaan.

• Private Sector’s Role:
  • The NGEs (this includes the private sector) are “allowed to undertake end-to-end activities in the space sector through establishment and operation of space objects, ground-based assets and related services, such as communication, remote sensing, navigation, etc.”.
  • Satellites could be self-owned, procured or leased; communication services could be over India or outside; and remote sensing data could be disseminated in India or abroad.
  • NGEs can design and operate launch vehicles for space transportation and establish their own infrastructure.
  • NGEs can now make filings with the International Telecommunication Union (ITU) and engage in commercial recovery of asteroid resources.
  • In short, the entire gamut of space activities is now open to the private sector. Security agencies can task NGEs for procuring tailor-made solutions to address specific requirements.

What are the Gaps in the Policy?

• The policy sets out an ambitious role for IN-SPACe but provides no time frame for the necessary steps ahead.
• Neither is there an indicative timeline for ISRO’s transitioning out of its current practices nor is there a schedule for IN-SPACe to create the regulatory framework.
• The policy framework envisaged will need clear rules and regulations pertaining to FDI and licensing, government procurement to sustain the new space start-ups, liability in case of violations and an appellate framework for dispute settlement.
• IN-SPACe is a regulatory body but doesn’t have legislative authority.
• IN-SPACe is expected to authorize space activities for all, both government and non-government entities. Currently, its position is ambiguous as it functions under the purview of the Department of Space.

What should be done to fill these Gaps?

• The Space Policy 2023 is a forward-looking document reflecting good intentions and a vision. But it is not enough. What is urgently needed is a time frame to provide the necessary legal framework to translate this vision into reality, to successfully launch India into the Second Space Age
• The government should bring a bill that grants statutory status to IN SPACe and also sets out time limits for both ISRO and IN SPACe. The bill should also address the ambiguity related to Foreign Investment, government support for new space startups.

The Indian Space Policy 2023 unveils the government’s plan to let private enterprises carry out end-to-end activities – from launching satellites and rockets into space to operating Earth stations. This will enhance the need for Satellite Insurance in near future.

3. Satellite Insurance:

So, it is there are successes & failures – both are involved in this satellite launching. Moreover, huge expenditures are also involved on various counts in all these launching affairs. So, the issue of Satellite insurance comes into the prime focus. This prompted me to come forward with this presentation on Satellite Insurance requirements & arrangements available in the General Insurance Market in our country & globally.

Satellite insurance is a specialized branch of aviation insurance in which, as of 2000, about 20 insurers worldwide participate directly. Others participate through reinsurance contracts with direct providers. It covers three risks: re-launching the satellite if the launch operation fails; replacing the satellite if it is destroyed, positioned in an improper orbit, or fails in orbit; and liability for damage to third parties caused by the satellite or the launch vehicle.

In 1965 the first satellite insurance was placed with Lloyd’sof London to cover physical damages on pre-launch for the “Early Bird” satellite Intelsat I. In 1968 coverage was arranged for pre-launch and launch perils for the Intelsat III satellite. Satellites are very complex machines which are manufactured and used by governments and a few larger companies. The budget for a typical satellite project can be in excess of billions of dollars and can run 5–10 years including the planning, manufacturing, testing, and launch.

Why to insure Satellite Risks?

1. Commercial requirement versus Government and inter-Government Projects;
2. Typical Investment Costs : Satellite / Launch / Insurance requirements;
3. Requirement of Banks and Project Financial backers
4. High risk of failure
5. International / National Law/ Convention (Covering various Liability Risks)
6. Special Characteristics like –
   • Technology
   • Total Loss of Satellite / Project / Business
   • In accessibility in Orbit
   • Replacement time

Who buys Satellite Insurance? 

1. Event coordinator – like NASA, ISRO, etc,
2. Satellite Manufactures
3. Launch Service Providers
4. Satellite Buyers
5. Satellite Operators
6. Satellite Users
7. Other financial interest holders – like. Banks & / or Concerned investors

4. Basics of Satellite Insurance:

Insurance available for satellites is divided into two sections, A) Satellite Risk Coverage and B) Ground Risk Coverage.

1. A) Satellite Risk Coverage:Satellite risk coverage is insurance against damage to the satellite itself. There are four basic types of coverage available in this section.
2. Pre-launch insurance provides coverage for loss or damage to the satellite or its components from the time they leave the manufacturer’s premises, during the transit to the launch site, through testing, fueling, and integration with the launcher up until the time the launcher’s rocket engines are ignited for the purpose of the actual launch.
3. Launch insurance provides coverage for the period from the intentional ignition of the engines until the satellite separates from the final stage of the launch vehicle, or it may continue until completion of the testing phase in orbit. Coverage typically runs for a period of twelve months, but is limited to 45–60 days in respect to the testing phase in orbit. Launch failure is the greatest probability of satellite loss and approximately 7% of satellites have failed on launch.
4. Coverage while in orbit provides for physical loss, damage, or even failure of the insured satellite while in orbit or during orbit placement. Elements of risk attached to satellites during orbit are damage caused by objects in the hostile space environment, extremes of temperature, and radiation. Because it is not typically possible to repair a satellite once it is physically placed in orbit, the coverage is basically granted as a product guarantee.
5. Third party liability is the final section of the policy, and is a statutory requirement of the Government of the nation where the launch will take place, regardless of the nationality of the satellite owner. A special license must be provided to the regulating authorities before a launch can take place. Coverage usually runs up to 90 days following the actual launch. Loss of revenue coverage is also available but is not purchased often.
6. B) Ground Risk Coverage: As many ground stations are run by large government entities such as NASA, ISRO, etc. – so failure on this part of the insured is rare. In cases where failure occurs due to events which are beyond the control of the insured (such as an earthquake), coverage provides for the cost of hiring premises, replacing computer systems, software backup, and other items necessary to resume operations.

5. The Satellite Insurance Market:

Emerging commercial space technologies, alongwith complex and substantial financial investments, presented a new type of high-risk exposure. Thus, the space insurance under writing community was developed, and the niche for specialized insurance was filled. The space insurance market is highly competitive,dynamic, and volatile with are relatively small group of U.S. and European insurance companies in the forefront.

The number of launches of currently insured commercial satellites is about 20 to 30 satellites per year, so the number of contracts is limited.This upward trend has been driven by expansion in the communications satellite industry and by growing demand for cheaper,more reliable, and more capable launch systems.

Therearefouressentialphases / typesofsatellite insurance being covered by globally:

• Pre-launch insurance, specifically property and cargoinsurance,covers satellites and rockets prior to launch.Pre-launchinsuranceusuallycoversrisksassociatedwithtransportationofthesatellitefromthemanufacturingfacilitytothelaunchsite,assemblyonthelaunchpad,inspection,and pre-lift-off activities. The period of coverage ends withtheintentionalignitionorlift-offoftherocket.
• Launch insurance is the most common type of space satellite Itmayextendfromsixmonthstooneyearafter the launch.Coveragecommenceswherepre-launchinsuranceends.Launchinsuranceterminateswhenthesatelliteseparatesfromtherocketandcompletesaninitialoperationalphaseoffunctionalitytesting.Thelaunch period may lastapproximately20to30minutes.
• In-orbitinsurancecommencesafterthesatellitehas completed itsinitialoperationalphaseoffunctionalitytesting, and normal operations in space begin. The life expectancyofasatelliteisapproximately10yearsandendswhenthesatellite’sfuel cells deplete. In-orbitinsuranceusuallyconsists of one-year renewable policies. In order for theinsurancecompaniestorenewtheIn-Orbitinsurance,theyrequire ‘health reports’ from the insured regarding the conBasedonthesereportstheyacceptrenewedcoverage.
• Third-partyliabilityspaceinsurancecoverslegalliabilityarisingfromdamagetoathirdpartyduringthelaunchorthein-orbitoperationsofasatelliteprogram.Avarietyofcoverageoptionsareavailable:personalinjury,propertydamage, damage to Government Authorities launch facilities, loss of revenue, service interruption, and material changes to g

5. Underwriting Perceptions:

When considering the premium rating structure for satellite insurance coverage, during the early days of insurance, many insurers based their rating according to the launch vehicle. For example, if the launch vehicle being used had a one in ten failure rate, the insurance premium would be ten per cent of the gross cost. Today, insurers use statistics and computer modeling to arrive at premium rates, although data for calculations is limited. Another aspect of satellite insurance is the procedure attached to salvage. Though it is impossible to obtain monetary value from the wreckage in the event of an actual total loss or constructive total loss, many insurers rely on sharing any revenue which may be obtainable from the failed satellite with the insured.

6. Insurance Regulation:

Rules of satellite launch technology is governed by International Traffic in Arms Regulation (ITAR) in the United States. This regulation states that the details of any technology provided to insurance underwriters are subject to strict rules and are provided to selected insurers only. This is an important consideration as the structure and technology used on launch vehicles is similar to missile technology for weapons. Failure to comply with ITAR rules could result in heavy fines and imprisonment. In cases where reinsurance coverage is arranged, re-insurers who provide such coverage have to rely on very detailed information – scanty information will not support the treaty.

As with launch insurance, the insured value is an agreed value, which at the beginning of the satellite’s service life is based on the replacement value. The sum covers the whole value of a satellite.

Meanwhile, of the 590 satellites in GEO and 280 in medium Earth orbit, highly elliptical and other orbits, 238 are insured for a total of $24.7 billion.

AXA XL is a leading insurer in the space insurance industry. They work closely with their clients and brokers around the world to develop innovative, specialized products covering all types of spacecraft and launch vehicles through development.Led by renowned space insurance experts, AXA XL also offers a unique and comprehensive suite of space satellite insurance products including pre-launch, launch, whilst in-orbit, and liability coverage for spacecraft and launch vehicles.

7. New India Assurance Company is the pioneer IN INDIA:

India has launched around 80 satellites until now, and one name that has been associated with the space programme throughout has been ‘New India’. It was the pioneer of satellite insurance in India and is still the main underwriter who issues satellite policies. India’s space programme dates back to the mid-1970s and the purpose was to develop indigenous rocket technology in the face of the sanctions imposed by Western nations consequent to its 1974 nuclear test in Pokhran. Its experimental satellites started with the launch of Aryabhata, built by Indian Space Research Organization (ISRO) in 1975, Bhaskara I and Bhaskara II in 1979 and 1981, followed by the Rohini series. In 1981 came Ariane Passenger PayLoad Experiment (APPLE) followed by INSAT-1A, the first operational satellite. The Indian space programme was taking off.

INSAT-1A was launched by a Delta rocket in the US in April 1982 but was abandoned in September when its attitude control propellant was exhausted. It had been insured since launch facilities abroad insist on insurance as part of their terms and conditions. New India paid the claim. It had, as always, protected itself fully with reinsurance.

Having experienced the comfort of insurance, the Government and ISRO started considering coverage for INSAT-1B. For the New India team in Bengaluru which had been pursuing the business, there was a breakthrough finally!Securing India’s Space Programme: The New India team led by Chairman cum Managing Director Mr. A. C. Mukherji during the handing over of the claim cheque of US$12 million for INSAT-1A to Chairman, Indian Space Research Organization, Professor Mr. Satish Dhawan in 1983. Manager, Reinsurance, Mr. B.C.K. Menon and Bengaluru Regional Manager Mr. K. K. Menon made their visit and revisit ISRO, the prospect. So did Bengaluru Regional Engineer Mr. Matthew Varghese. ISRO decided to insure, but only those launches from centers abroad. Later when INSAT-1C failed and INSAT-2D died in orbit, insurance was available as the safety net.”The reinsurance was difficult to place at first because we were new,” says Mr. O.P. Rana, who had returned from New India’s Australia operations in the late sixties and was in the Reinsurance Department at Head Office. To set things rolling the then Secretary, Department of Space, Mr. T. N. Seshan and Mr. A. C. Mukherji, then New India’s Chairman cum Managing Director, travelled to London to conclude the reinsurance programme. They met many underwriters and the business was placed in two phases in London and in the US market.For later programs New India needed to go only to the main centers of London and Munich and then the underwriters started to come to India to meet New India Officials.In the beginning it was a reinsurance-led development and the rates for India were very high. But premium rates were reduced as& when New India gained expertise. Of the subsequent ISRO programs New India has insured GSAT-10, INSAT-3D and GSAT-7. It has also covered GSAT-16 launched in December 2014 and the pre-launch expenses of GSAT-15 scheduled to be launched in October 2015.The satellite insurance programme has been a signature achievement for New India and a profitable business too since then.When it comes to foreign joint ventures – it’s the foreign space agency which usually has insurance as a clause.And that is why ISRO compiled and bought insurance. But Chandrayaan-2 now has set the agency rethinking on how to curtail losses in its pursuit of scientific exploration. The insurance of INSAT-1A required the then Department of Space Secretary Mr. T.N.Seshan and New India CMD Mr. A. C. Mukherji to travel to London to conclude reinsurance. The team needed the support of underwriters in both London and the US market to cover the Satellite programme. For later programs, New Indiare-insured with the underwriters in London and Munich and earned huge premium in that process.

Marsh is already involved ininsuringthe satellitesbeing launched from US&India during 2023. ‘OneWeb’ confirmed to sign an agreement for an aggregate insured value of more than $1 billionthrough Marsh in September 2021 and now that relationship will cover the remaining satellite launches for ‘OneWeb’ to complete its Gen1 constellation.

8. WHILE SUMMING UP:

Now, after the successful landing on moon with a very scanty expenses by ISRO (in comparison to similar U.S. & European launching expenses), specialist underwriters from abroad will fly down to India to underwrite ISRO’s satellite programmes in a very competitive& comprehensive premium rate, no doubt, although all of the Chandrayaanseries satellites are made in India and to be insured in India with global reinsurers’ expertise, support & advice.