Satellite operator SES launched the first four of its important O3b mPOWER satellites back in December 2022. The satellites, built by Boeing, suffered problems in use which resulted in SES making an insurance claim for $472 million (€436.9m).

The problems were said to be electrical and, in October 2023, SES said they were worse than first thought and that their operational life would be shorter than the planned 12-year period. The power problem saw the satellites frequently ‘tripping’ off their power modules while in orbit.

Boeing, at the time, had two other O3b mPOWER craft ready for launch. SES negotiated with Boeing a new contract which meant that overall Boeing would build 13 of the satellites instead of the planned 11 and would modify the remaining – unlaunched – satellites without any cost implications to SES.

Hence the insurance claim, but reports (notably from Space Intel Report) suggest that the insurance industry is resisting paying out on the SES claim.

SES is arguing that with clear faults in place the insurance policy should also cover revenue losses from the orbiting fleet.

Seemingly the insurers are saying that while they recognise the problems with the O3b fleet they cannot cover what might happen over the future lifetime of the satellites.

The SES claim is for some 70 per cent of the total insured value of $674 million.

SES now has a pair of mPOWER craft (#6 and #7) in orbit which had corrective measures implemented ahead of launch last December. All future mPOWER satellites will have had the required modifications.

SES, in its Annual Report issued on March 3rd said: “Health issues emerged with the initial four mPower satellites, prompting SES to initiate insurance claims under its ‘Launch plus sixteen months’ insurance policies. The Company submitted Proof-of-Loss documentation to its insurers and negotiations with those companies were initiated in 2024 and will continue beyond the year-end. In the absence of formal acceptance of the claims by most of the external insurers, management is of the view that these claims qualify as contingent assets in the sense of IAS [International Financial Reporting Standards] 37. Accordingly, income is only recognized when claims with individual insurers are agreed and settled.”

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Categories: Articles, Business, Satellite

Tags: insurance, mPower, SES