The Massively Complicated Task of Buying Insurance for a Satellite
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- čas přidán 3. 05. 2024
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Video written by Ben Doyle
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I once lived in an insurance town, where one of my friends did a motivational speech. She asked what someone in the audience's profession was, and got the reply "cat modelling". Fascinated, my friend asked some follow up questions about whether the audience member was a cat groomer or a pet photographer, and got the reply that she created statistical models of risks of hurricanes, earthquakes and other catastrophes.
LMAO yeah, "cat modeling" is short for "catastrophe modelling".
Literally my job! It’s so much better to say you are a cat modeller, saying you work in insurance totally kills the vibe at a party 😂
@@teddyharcourt2542 I've been to some pretty awesome insurance parties tbh.
So cat modeling could mean modeling catastrophes if 'cat' is a shorthand, but it could also mean that you work for someone that sells pet insurance, and you profess in creating statistical models of feline bretheren.
My partner works in the property insurance industry, I know a lot of these people LOL
"We are calling to ask about your satellite's extended warranty" - Space agency's nightmare
Lol, good one!
Fun fact, NASA has a policy of never buying insurance for any of its satellites, space probes, etc. I'm not sure if other space agencies have similar policies, but I happen to know that one specific Russian launch in the early 2000s also was not insured.
@@jeffbenton6183 Do they at least set aside money to cover the possibility of a failure? Do they have an investment fund, perhaps?
@@moonman239 pretty sure they question of the hardware nasa sends to space is not if it will fail, but rather when.. also it is basically impossible to put a price tag on them. spontaneous example: the Voyager probes. they are now almost 50 years old, and most of their systems are inoperable by now (not enough power), but the data we still get from them is invaluable because they are in a place where it it impossible to get a replacement to in any reasonable timeframe. how would you even start insuring that? Or what about the Mars Rovers we sent so far?
Their Value is not in the Materials and Labor which got them built and into Orbit, but rather the Data they keep giving till they cannot do it anymore.. most of them cannot just be replaced by being given some cash, and in many cases a straight up replacement doesnt even make sense, because by the point the Insurance would have to pay for a new one the Tech has advanced enough that starting with a new program makes more sense... so why bother with it in the first place?
Tell me about it! (I need to pay in-orbit insurance fees for a satellite each year)
Most projects that aren't multi-million dollar satellites opt to build a flight spare instead of a launch insurance, in case the flight model blows up there's another one. The premiums can be so high that it makes sense to just build another satellite as spare at the same time so there's a few savings. Added benefit is that you spread risk during manufacturing because you have spare parts in case something is damaged pre-launch.
In-orbit insurance in my case mainly covers for 3rd party liability, not the failure of the satellite itself, and is mandatory due to the law of my country (the Netherlands)
Fun fact: if your satellite is non-operational (EOL or dead), many governments do not require insurance anymore, even though your now fresh piece of space junk can still crash in to something else...
Another advantage of a spare after launch is for debugging and problem solving, you can replicate a problem you're having with the one in space down on earth, and make sure the fix works on that one before pushing any fixes to the active satellite.
That's fuckin crazy, how did you get to even have a satellite 🛰
@@AugustusAsgeir its surprisingly easy, the cheapest you can get is a cubesat, you can launch it up with a commercial rideshare and boom you got a satellite
@@AugustusAsgeir Probably managing the finances for a corporate satellite I'd wager. But a private/small business satellite isn't impossible, you'd be surprised. "Cube" Satellites, or anything small enough to get launched on a ride-share program really, are actually somewhat conceivable price-wise. While very expensive, they're hundreds-of-thousands or low millions, not tens or hundreds of millions.
That said, even for a small shoebox sized CubeSat, the premiums have to be stupidly high. But the value of the data they provide can easily be several times that (usually environmental or weather-related stuff, but communications is an industry they're sometimes used in as well).
Cool! When you say, “[…] covers 3rd party damages” are those 3rd party… the other satellites? Or also covering contractor work on the satellite itself (or would that fall into the satellite functionality)?
Sorry for being nit picky, genuinely curious. Thanks!
"It turns out that the rockets we use to send satellites to space are awfully similar to the rockets we use to send deadly explosives to Afghani weddings" Holy crap I nearly spit out my coffee lmao
That was pretty dumb of you
Where's the joke /s
He made a similar joke about drone strikes on Afghan weddings in a previous episode
It was very funny, but get's more grim the more you think about it.
they really don't hold back on these stuff I love it
Is Ben going to have to insure his sobriety on the next season of Jet Lag?
How do you get to hell?
Very simple: claim that you're innocent.
How do you get to heaven?
Very simple: Admit that you're not Innocent, you're guilty and ask for mercy.
How to know if you're guilty or not?
Simply: Compare your life to the Ten Commandments God gave you in the Bible.
Everyone agrees that if people followed the ten commandments there would be no need for governments or police.
Do not lie.
Do not steal.
Do not commit adultery.
Do not insult God by using his name as a cuss word.
There are six more but let's just leave it at that.
How many lies have you told in your life?
Have you ever taken anything that didn't belong to you?
Jesus said, if you look at a women lustfully you've already committed adultery in your heart with that woman.
How many times a day do you do that?
Do you use God's name as a cuss word?
Would you do that with your own mother's name?
If you answer these questions honestly you know that you're guilty.
God can justly punish you and send you to hell.
Ask him for mercy.
His name is Jesus.
It's as simple as this, The Ten Commandments are called the moral law. You and I broke God's laws. Jesus paid the fine.
The fine is death.
Ezekiel 18:20 -
"The soul who sins shall die.
That's why Jesus had to die on the cross for our sins. This is why God is able to give us Mercy.
Option A.
You die for your own sins.
Option B.
Ask for mercy and accept that Jesus died on the cross for you.
@
That's a definite payout
Didn't you watch the video?
They can't issue an insurance rate for something with a 100% chance of failure.
time to find out!
@@yourfriendlyneighborhoodin1559my brother in christ this is a video about satellite insurance
So I work in space insurance. Great video, hit all the big points very accurately.
One thing that would have been a good mention is the fact that a lot of space underwriters are literal rocket scientists. Like they built launchers and satellites in industry for 15 years then moved into insurance. So they really understand a lot of the technical aspects of space in a way that is very different to other insurance lines. (To use Ben’s example, an auto underwriter doesn’t have to be a mechanic to write auto insurance).
Wow! How do you get into space insurance?
@@sebster100 He literally just told you. It also requires intelligence...
It's sounds like a lot of Bayesian stuff.
I was an Aviation and Space Underwriter for four years. I don’t even have a degree and knew little more than what this video teaches you. 😂
The trouble with the cost of insuring a satellite is that the prices can be sky-high!!!
it can even leave a vacuum in your bank account!
sky-high doesn't seem like much for this case
I know right, just the other day I wanted to get mine insured but the prices were out of this world.
Beyond stratospheric!
You could say they are out of this world
As an underwriter for more niche products this makes my little heart so happy!! I’d say though that insurance companies will most likely hire an engineer w deep knowledge and expertise on satellites to inspect the satellite specifications and prepare a report for underwriters to make final decisions :) Underwriters for aerospace products most likely have relevant background that qualify them as well. We can’t afford to actually take a shot in the dark per se :)
I'm assuming the policies are written before the satellite gets built, so what does the insurer have to gain by inspecting the satellite? Can they mandate changes or increase the premium if they don't like what they see?
lol you just look it up in the underwriting manual
@@brianbarker2551 yeah, because no one has ever had a job ever. You and everyone else who talks shit about people not having certain jobs need to get off the internet and live life.
Underwriter with a small heart. And the world was not surprised.
“Here comes the International Traffic in Arms Regulations to ruin everyone’s fun again” Relatable af
Honestly, ITAR is a serious buzzkill and is probably the single most fun-ruining law that impacts my daily life. And I am not joking
Damn, JASDF Supply Officer?
You know what I really love about these videos? You're bopping along, learning some pretty mundane stuff presented in a pretty interesting fashion when Sam just hits you with that stinger missile of a one-liner that just makers you pause the video and go "Oh no, he did not just..."
I wouldn't be surprised if Half As Interesting's next video would be "The Massively Complicated Task For Discord Moderators"
I don't think they have enough experience, sure there is Jetlag - the Discord, but that one is fan run.
Staying under the radar to continue grooming children and avoid pursuing an undercover cop masquerading as a tween.
What an oddly well timed video. I too was wondering about this after that rocket failed to launch those satellites yesterday.
The entire launch was a joke
There's been three different failures the last month coincidentally. Space is hard
Me: "Sorry I can't i've got a lot of things to do"
Also me: *watching a video about satellite insurance*
Just for reference, Merv Hughes's moustache is vastly more important culturally to Australia than say, the crown jewels of England were 100 years ago or longer, back when everyone was into that kind of thing.
This is the first HAI episode after 1 rocket went swimming and another went Kaboom. Good timing!
I had to listen to this. I had been an insurance claims adjuster for almost 45 years. In the 90’s I handled a claim for paint for the Space Shuttle.
"a very polite way of highlighting your special relationship with mortality"
that line literally killed me lmao
Hope you were insuranced do your parents didn't waste all that money.
@@alexcisneros2980 Lmfao
2:04 as an actuary (who calculates insurance risks. Why this wasn't mentioned in the video?)
in Non-Life insurance it is normal that you have 3-4 "good"/profitable year and one "bad" one.
A valid question. This video continuously and inaccurately states the work of done by actuaries as work done by underwriters.
I was not expecting Merv Hughes and his glorious moustache to turn up in an HAI video, but as a Victorian (the Australian state, not the historical era) I am absolutely here for it!
"Merv! Merv! He's a hero this man!!" - W. Lawry
Now I feel special! For a year I work on this exact insurance! There is very small amount of insurance companies that operate in this space (see I can make puns too!)
(4:40) "Satellites crashing into each other trapping humanity" is called the Kessler syndrome. It's a theoretical scenario (so far) where more collisions mean more debris which hit more satellites creating more debris… eventually creating an impassable field of deadly space trash orbiting at several km/sec and preventing any spacecraft from going into orbit or beyond.
Well, kesller is solveable within a few hundred years, if you have powerful lasers.
Sounds like a good theme for a movie....
The thing about the Kessler Syndrome is that it doesn't permanently disable all space flight. Rockets actually going to *space* rather than *orbit* are unlikely to be harmed. The problem is that satellites need to stay in a very specific orbit to remain geostationary (and thus useful), and they need to stay there for decades, which makes them a very easy target for random bits of space trash that could turn them into a brick.
@@SuperSmashDolls what makes you think that the launch vehicle is any less susceptible to space debris than any other space vehicle? Also, the likelihood of the Kessler Effect happening is really a Low Earth Orbit problem, not a GEO problem as you have described.
40 years designing, building, testing and launching satellites. LEO constellations like Starlink are legitimate threats to the entire aerospace industry and everything that relies on it.
@@SuperSmashDolls Geostationary Satelites need to stay in this exact Orbit, but that is just a fraction of all Satelites.. this specific orbit is not used by GPS, GLONASS, Galileo, the ISS, the Chinsese Station, Iridium, Starlink and many more single Satelites and Constellations.
Wait, actuaries are the ones who come up with statistical models. Underwriting is about determining if the person or thing qualifies for the policy
as an actuarial student, i searched for this comment
@@alexjwolfe2 haha thanks. BTW nice choice on a career! You'll live comfortably
Sadly, underwriters were given the credit of actuarial work within this video.
@@carterdyksen I know and there is a huge gulf that separates the level of skill required between the two. More than that, it makes me wonder how many other sloppiness-related errors have I unknowingly missed in other HAI videos. I watch these videos--dumb puns and all--because I like to learn something new and interesting. But this kind of calls into question their accuracy and scholarship (or lack thereof)
yeah, the guys that price the stuff, don't get yelled at by the agents or the clients. What do you mean he's sub-standard, he only takes three medications! I don't make the rules dude, but I get to enforce them...
Many times the insurers will limit their risk to any one loss by taking some of the premium and buy reinsurance, often via the Lloyds of London insurance market. They spread the risk to a number of other companies, with layering of risk at different levels of coverage. There will usually be very high deductibles as well. That is also done with many other areas of risk like on building fires and weather damage, ships, airplanes.
"No one could make an entertaining video about how niche insurance policies work!" Sam: "CHALLENGE ACCEPTED!"
I was just in the market for a satellite, this helped clear a lot of my worries about insuring it thanks
I am definitely going to phrase this like the troll at the bridge in Monty Python and the holy grail... "what... is the cost of insuring a satellite?
"Pre-launch, launch or orbit?"
"I don't know that!?!"
*flies into the abyss*
A king must know these things...
Sometimes the Hello Fresh box also contains a set of car keys. Then you wonder if you've been chosen for some kind of weird game, or if there is a warehouse worker somewhere freaking out because their co workers have played a funny prank...
wait what?
What
“We’ve been trying to reach you about your satellite’s extended warranty.”
I was literally just thinking about this after the UK space launch ended up with the satellite in the ocean. Super interesting!
I suspect the launch and in-orbit insurers will be arguing about who's labile to pay up.
In the fastest-moving-object video, I laughed out loud when Sam said "BAM" at the exact-right moment. I haven't laughed out loud at an HAI video since, until now, and tonight I did it three times. ("And 'standard' being a very polite way of highlighting your special relationship with mortality.'" / "It turns out that the rockets we use to send satellites into space are awfully similar to the rockets we use to send deadly explosives to Afghani weddings" / "So the underwriters literally have to guess which launch vehicle will get used, and then cross their fingers and hope it's not one of the ones with a one-hundred percent failure rate." Bravo. Seriously.
The best part about kessler syndrome is that you cant even send up some giant magnets to sweep up debris as satellites tend to be made mostly from non-magnetic materials...
Yeah,the horror of finding out about sunstorm induced wear on ball bearings in gyroscopes,years after the launch. We do our own party,you talk super bowl random citizen.
That ending was so perfect to talk about the Kessler effect… but all with all a great video
Ah yes. Just in case I need to insure my satellite.
Just in time for the few satellites blown up by Virgin Orbit
They've been waiting on this one
Missed the opportunity to title this video, "the out of this world cost of insuring a satellite"
I wonder what's the most expensive thing (other than real estate) you could call an insurance company for and get the go-ahead that they'll insure. A Bugatti? a Harrier jet? a hadron collider? I need answers to this.
After some googling, the most expensive thing is Itaipu Dam, which would cost 77 billion USD after inflation adjustment. People insure their construction project as well, so I think this might be the prime candidate for the most expensive insurance.
Worked at Munich Re for a while... The underwriting is actually as wild as he says it
this gets a few things wrong. insurers actually send technical experts to oversee the entire production of the launch vehicle so they are 100% sure they've spotted any problems with the build quality etc and that forms a big part of the insurance deal.
To be clear, the rockets we use to send stuff to space are _nothing_ like the rockets we use to send explosives to Afghani weddings - it's just that they were in the 60s, and the U.S. government is never going to declassify something if it doesn't have to.
I'm an insurance professional so I am so excited for this one...
I’d loooove to apply to be an insurance inspector/ adjuster floating around the satellite like ….. yup it’s broken but we can just change the panel buff it out 😂😂
Don’t you love it when understanding satellite insurance is easier than American health insurance
I don't know how this works in the USA but in the Netherlands large policies are often packaged and ''sold'' to other insurers as a way to spread out the risk. The insurance company that buys into this get's a certain percentage of the premiums paid but is also responsible for a similar percentage in paying out should a claim be paid out. This allows insurance companies to insure objects or events that otherwise would be uninsurable since the combination of extremely low frequency and extremely high value can bankrupt an insurance company, even if the risk calculations showed a worthwhile risk. An example of this would be the fact that the nucleair powerplant in Borsele in the Netherlands has a liability insurance for the event of a nuclear accident.
re-insurance is standard across the globe.
Thank you for this! I was looking to buy insurance for my satellite
Yeah starlink's potential for kesslerization is why they were set at an altitude which deorbits passively within 10 years or less if not maintained by thrusters. So essentially a collision could trap us for 10 years and then after countless meteor showers we could go back up there. (550km altitude and a high surface area relative to mass)
The debris doesn’t stay in one orbit
@@motor2of7 For the most part it should. Yes adding or subtracting impulse with a collision will change the orbit of the debris but especially at these low earth orbits that takes so much energy to accomplish that the spread is minimal. And the particles should be more or less normally distributed with a mean at the same orbit it started at.
@@alexanderx33 yes, the bulk of the debris will somewhat move in its original orbit, but the Starlink constellation follows multiple orbital paths. Once the debris migrates beyond its original orbit into crossing orbits with much higher impact velocities its game over. LEO has typically only had a few hundred satellites at any one time. Starlink is approved for 17,000 satellites, Kuiper another 4,000, and there are others planning similar systems. Once the chain starts, it’s unstoppable and the debris cloud will last for a lot more than 10 years.
Love the timing of this after the UK just launched a satalite that crashed into the sea
There were like 6 different satellites onboard, and preliminary reports say they were all uninsured. Oof.
Yay a video written by Ben!
Insurance agent here! Just a note, insurance is generally speaking not mandatory. If a company (or an individual) can afford to replace something without affecting their overhead by much, they usually don’t insure it because what’s the point of paying an exorbitant premium when you can just pay for the risk outright if it’s a total loss.
I’m assuming whoever is underwriting these satellites (probably Lloyd’s because they love insuring everything) is primarily binding Liability policies if the satellite were to fall back to earth and hit someone or their property :)
Nope. The manufacturers will often self insure pre-launch but the buyers want insurance for the launch and definitely for most of the on-orbit lifetime. A hundred million dollar satellite will generate billions in revenue over a 20 year lifetime. There’s no way they will risk their business model on something that can’t be repaired.
It probably missed most HAI subs, but here in Britain we had our first satellite launch a couple of days ago. It was a Branson Virgin project to send a satellite rocket up from a 747. I think the rocket detached, from the plane, but then failed, and dropped back to earth. Apparently several satellites crashed with the rocket. I was wondering at the time - was it insured? I guess this answers the question!
@4:42 it's called Kessler effect
We’ve been trying to reach you about your satellites extended insurance plan.
I’m so glad I can now use this information to insure my satellites.
Thought I ought to complain about the modelling joke - keep them coming.
Hello Sam,
Happy New Year 2023 !
Also, like your travel adventure videos. I got go and search for them because YT doesn't show them to me.
Together with the challenges (I mean, get drunk or capture four local bugs) you could show yourself in some typical local activities - a cooking contest, a dodgem race, even one of those 15-minutes football games. Anything fun, really.
Regarding satellite insurance, you didn't mention the most frequent mission killer after launch failure: a second stage failure. Almost all new Space companies had or are having second stage failures, where the satellites are lost high - 60+ miles - in the atmosphere. This because the first stage kill the second stage with all the vibrations and shakings. Older Space companies know how to build robust second stages.
Regards,
Anthony
@spiralshadow
11 hours ago
"It turns out that the rockets we use to send satellites to space are awfully similar to the rockets we use to send deadly explosives to Afghani weddings"
They're not even remotely similar. Cruise missiles aren't even rockets, they're jets. The issue with commercial orbital rockets is that they are similar to ballistic missiles.
This is exactly the kind of video I'm interested in
I’m literally cooking my help fresh meal as I watch this.
Launch insurance don't improve that much knowing about the rocket, yes it help for new rockets who are also the far highest risk.
If you launch a lot over a long time you get better data and the rocket also get more reliable as you fix issues.
Now its insane that you can insure without knowing the rocket. Yes that can change war is one reason another might simply be delays or grounding.
However if your contract was for an Soyuz but you has to change, I say falcon 9 should have similar rate while an new company would have much higher rate.
In orbit insurance on the other hand sound hard.
Now i kinda curious tho... So, if the one hit the insured satelite is unknown space debris which has no clear ownership, are they cover it too?
Also if its recorded satelite, do the sattelite owner get double compensation, from the Insurance and the Launching state of the space debris?
This video lived up to the name of "half as interesting"
Love to see Merv Hughes mentioned on HAI
@4:35 the Tesla launched as a test payload on Falcon Heavy is in an orbit that doesn't intersect Earth satellites.
1:28 The people who don't have friends anymore but still play every Friday are like: ""
Honestly, I want to get a satellite into space at a some point, so this might come in handy. Even a tiny satellite will cost 30k, so insurance seems like a good idea.
Damn you CZcams.... You keep giving me answers to the questions I never even thing about... Who would've thought satellites had insurances!
Funnily enough after seeing the recent British satellite launch failure, I wondered if they were somehow insured for the loss of the satellite.
noticed how Wendover and Half-as-Interesting uploaded at nearly the same time.
1:28 Playing Russian Roulette with a pistol is a high risk activity.
When the Kessler Cascade happens - will the cleanup crews be doing "Kessler Runs"?
Waiting for the next episode of Jet Lag while watching this
Virgin Orbit: Now you tell me about this
ABL: OK
Well timed video after yesterday!
Damn, I wished you told me all this before I had put my satellite up on Virgin Orbit a couple of days ago!
I would imagine life insurance for astronauts incorporates the processes described here.
Never before have I heard the word "Bus" be described as fancy, but I guess everything is fancy with satellites.
The idea is pretty similar to a computer's internal data bus, really. Every part is connected to a common module that ferries messages/power/whatever to each specialized component
ah, yes, "...a bus what is a FANCY name for this thing." Yes sam, bus is a very fancy word, it sounds like billy shakespear
3:23 subtle Arrested Development reference.
rip the insurance companies when a big geomagnetic storm hits
Need more video on Insurance
Thank you HAI
On the bright side - if ALIENS 👽 invade all that space debris might damage their invasion fleet - unless they were made out rock like a 2019 movie CAPTIVE STATE.
Sadly no,they will only have problems for a couple hundred years to operate satelites
Woudln't the contracted launcher, i.e. Spacex, pay compensation for damages at launch or incorrect orbit?
Err you didn't cover the reinsurance of the satellites insurances (the insurance of insurance) nor the retrocession (the insurance of the insurance of the insurance).
Also this is very similar to planes, they always have different insurances for different parts (hull, life, cargo)
... I work in reinsurance
then rates drop, and the gov't brings in the TARP
to be fair, there is also sub-standard (you're worse than average) and decline (we won't touch you with a ten foot pole). And postpone (we don't know, come back later).
Interesting timing after both Virgin Orbit and ABL had failed rocket launches...
Space debris is actually a really serious potential problem, and it is already quite an issue.
That kid at 3:01 looks like a character from a horror movie
Didnt think I'd need to know insurance law
When Aliens take down your satellite and the issuance calls it an Act of God 🙄
Can't believe you didn't talk about the sattelite reposession by STS-51A for some insurance comapnies
Not a repossession, more like a refurbishment.
1:51 did you try hard to find this stock video for the phrase "easy to model"?
Great timing on this video, with the last 2 US rocket launches both being failures. Good thing SpaceX exists!
4:50 I feel personally attacked
Satellites do in-fact have the most expensive insurance outside of the world
Thanks, thats what I always needed ;P
I found the legs and moustache more interesting than the satellites, can’t lie
You forgot to mention those countries who don't give a rat's patootie if their junk crashes into anyone else's...
Or for that matter eventually falls through the atmosphere and into someone or something on terra firma
Hey Sam, good job on this!! Even if a few details were a bit off, you clearly put in a lot of effort to understand a complicated topic, and I appreciate you.
Oh shut up
4:46 That literally could never ever ever happen. Any launch vehicle could just launch through the debris layer, minimizing the time it spends there and maximizing defensive structures on the spacecraft. It would certainly be very bad but would not trap us on Earth.
This is not true, look up kessler syndrome.
Absolutely incorrect. Even tiny debris can penetrate structures. If the Kessler Effect ever happens, you can kiss your DirecTV and XM radio goodbye, along with GPS and every other service that relies on satellites. It’s a big deal with disastrous consequences