RMWG OutbriefOctober 11, 2007

Chris KunstadterVice President

XL Insurance(+1) 212-321-6510

chris.kunstadter@xlgroup.com

Page 2 Apr 21, 2023

Agenda

The state of the space insurance industry

RMWG Topics

Page 3 Apr 21, 2023

Recent Issues in Space Insurance

Third-Party (Liability) Insurance Impact of Proton failure Chinese ASAT test

First-Party (Physical Damage) Insurance Losses in 2007 exceed premium Delays in Sea Launch and Proton launches

Page 4 Apr 21, 2023

Proton Launch Failure in Kazakhstan

Page 5 Apr 21, 2023

Recent Debris Events in LEO

www.st-suunnittelu.fi/romu/

www.centerforspace.com

Chinese ASAT Test, 11 Jan.

Proton Aux Motor Explosion, 14 Feb.Breeze-M Explosion, 19 Feb.

Estimated debris >5-10 cm from Jan & Feb 2007 breakup events:

FY-1C (Jan 11): >2,200 piecesBeidou 2A (Feb 2): 100 piecesProton Aux Motor (Feb 14): 60 piecesCBERS 1 (Feb 18): 24 piecesBriz-M stage (Feb 19): 1,000 pieces

Page 6 Apr 21, 2023

Profitability

Relaxed UnderwritingFlight to Quality

Inadequate Reserves

Increased Capacity

Seek Market Share

Inadequate Rates

Mounting Losses

Profits Rise

Rates Increase

Capacity Decrease

Insolvencies/Withdrawals

The Insurance Market Cycle

Rates Decrease

Hard Market

Soft Market

You are here?

Page 7 Apr 21, 2023

Insured Launches

0

25

50

75

100

125

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

LEO & other satellites

GEO satellites

Insured launches

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Market Exposure In Orbit

$0

$5

$10

$15

$20

$25

Jan-97Jan-98Jan-99Jan-00Jan-01Jan-02Jan-03Jan-04Jan-05Jan-06Jan-07

($ b

illi

on

s)

0

50

100

150

200

250

Un

it c

ou

nt

Insured LEO and other Satellites

Insured GEO Satellites

Market Aggregate Exposure

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0%

5%

10%

15%

Launch Vehicle Failure RatesCurrent GEO launch vehicles*

* Current GEO launch vehicles included in this survey are: Ariane 5, Atlas 5, Delta 4, H-2A, Long March 3A/B/C, Proton M/Breeze M, Soyuz Fregat & Soyuz 2, Zenit 3/SL

Ave

rag

e

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0.0%

2.5%

5.0%

7.5%

10.0%

Satellite Failure RatesCommercial communications satellites1st year (i.e., “post-separation/IOT” phase)By manufacturer*, since 1997

Ave

rag

e

* Major “Western” manufacturers of commercial communications satellites included in this survey are AAS, Antrix, Astrium, Boeing, LM, Loral, Orbital

15.8%

Page 11 Apr 21, 2023

0%

1%

2%

3%

Satellite Failure RatesCommercial communications satellites2nd & subsequent years (i.e., “in-orbit” phase)By manufacturer*, since 1997

Ave

rag

e

* Major “Western” manufacturers of commercial communications satellites included in this survey are AAS, Antrix, Astrium, Boeing, LM, Loral, Orbital

Page 12 Apr 21, 2023

Split of Claims Between Launch and In-Orbit Phases

0%

25%

50%

75%

100%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total

Launch Vehicle Losses Satellite Losses

38%

62%

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Annual Premiums and Losses

-$1,500,000,000

-$1,000,000,000

-$500,000,000

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Earned premium (net of brokerage)

Incurred losses (paid and potential outstanding)

Net result since 1998

Page 14 Apr 21, 2023

Total Cumulative Return for Space Insurance Market(since 1998)

-100%

-75%

-50%

-25%

0%

25%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Page 15 Apr 21, 2023

RMWG Topics

Commercial human spaceflight task force Subgroup of RMWG Brainstorming and developing agenda for topics to be

brought to the full RMWG Specifically looking at human spaceflight issues Ongoing effort

Page 16 Apr 21, 2023

Topics for further study

Requirements and availability of insurance for personal space flight

FAA safety regulation of human space flight Inter-party waivers of liability State-based legislative initiatives MPL calculation methodologies Definition of third parties under concurrent

operations Application of industry standards