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Capitalism in space: Because the insurance industry is presently charging significantly more to insure a Proton launch than it charges for Falcon 9 or Ariane 5, the Russian share of the launch market is threatened.
Insurance premiums for launches of International Launch Services’ Russian Proton rocket, which satellite operators and insurers say is a necessary third leg for the commercial market — the SpaceX Falcon 9 and the ArianeGroup Ariane 5 being the other two — total about 12% of the insured value. That compares with 3-4% for Ariane 5 and 4-5% for the Falcon 9.
In dollar terms, that means that ILS customers seeking a $200 million policy covering the the value of the satellite, the launch and the satellite’s first year in orbit, would pay a $24 million premium. The same customer launching the same satellite on Falcon 9 or the Ariane 5 would pay no more than $10 million, and possibly less.
The industry cites the quality control problems experienced by the entire Russian space industry, and Proton in particular, in the past decade for this differential. They say they expect these rates to fall if Proton continues its string of successful launches, now totaling 12 in a row.
The article also includes an interesting interview with Kirk Pysher, the head of International Launch Services (ILS), which handles the commercial launches of Proton for Russia. He mentions the possibility that Russia will self-insure so private customers will no longer have bear the cost of these higher rates, thus making ILS more competitive with SpaceX and ArianeGroup.
I think there is another unstated reason why the insurance company is charging more. In the past five years Russia consolidated its entire aerospace industry into a single corporation, Roscosmos, run by the government. I suspect that insurers do not trust this set-up for being the best vehicle for achieving efficiency and good quality control, and that is why they are still taking a wait-and-see attitude on whether Russia has gotten a handle on the quality control issues that caused so many failures in recent years.