From his earliest years, Jan Schmidt was fascinated by aircraft. He extended that fascination to space technology during his student years, earning him a position in the European rocket programme. During six years of working on component development and manufacturing for Ariane launch vehicles, he learned a lot about the risks involved in lifting satellites into orbit and the tremendous costs connected with space projects.
“Every year sees the launch of up to 25 new commercial communications satellites,” Jan explains. “They cruise in very harsh conditions, 36 000 kilometres above the equator, and have a service life of 10 to 15 years. These ‘birds’ provide essential services that directly drive the economy, including the things we take for granted in our daily lives: mobile phones, television, e-mail, online news and web commerce.”
No insurance, no satellite
Jan’s journey from rocket science to insurance began at a party, chatting briefly with someone who worked for a company that, among other things, dealt in space insurance. “To be frank, insurance didn’t seem all that compelling at the time – but we exchanged business cards, and I went for an interview a few days later. During that interview it became clear to me how important insurance is to structuring and funding commercial satellite projects. In a nutshell: no insurance, no loan; no loan, no satellite.“
The persuasive factors for joining Swiss Re were the wealth of expertise within the company and the broad spectrum of activities it covered. “One of the things I appreciate about Swiss Re is that the business has so many facets. You never stop exploring new fields and developing new solutions. We work hard here – and, in return, the company invests a lot in its employees’ professional development and well-being.”
The Space team is part of Corporate Solutions, Swiss Re’s business unit for commercial insurance – an area where Swiss Re can play to its strengths in underwriting large and complex risks and thus sees potential for profitable growth.
Learning a new science
Jan Schmidt recalls the extensive support he received in getting up to speed on insurance. “I don’t know how many courses I took in the first six months! Basically, I had to get a grip on the whole process from risk assessment and risk modelling to underwriting and claims – and fast.” Jan rose swiftly through the ranks, and soon the insurance courses were being replaced by leadership training and networking opportunities.
Today, Jan heads the Space team at Swiss Re and lectures at external events on the role of insurance and reinsurance in structuring and financing commercial satellite projects. “To give a flavour of the market, there are currently some 160 insured satellites in orbit, worth approximately USD 23 billion in total. The insured value of a geostationary satellite is usually between USD 150 million and USD 400 million. Depending on the risks involved, this will translate into a premium of around 10% of the value.”
Tailoring the product to the client
“There is no such thing as a standard space insurance policy,” Jan explains. ”Cover is tailored to each individual satellite and mission, and each specific client’s needs. We are recognised industry-wide for our ability to offer clients multi-year coverage, such as our ‘launch plus 5-year’ policies: Swiss Re is the only market participant offering such a product.” Jan has been working in insurance for almost a decade, but rocket science continues to fascinate him: “Imagine being at a hypermodern launch facility in the jungle of French Guyana, watching a thundering rocket shoot into space – it certainly makes my heart beat faster! Commercial satellites aren’t just cutting edge technology, though, they can break through other frontiers as well. Recent projects aim to reach populations that don’t yet have access to the information and financial services that the rest of us do. I’m thrilled at the potential of satellites to expand access to education and to support growth and stability in deprived parts of the world – and at the fact that we can help unlock this potential with our insurance solutions.”
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