66 firms insure two satellites for $460 million

JAKARTA (JP): A consortium of 66 domestic insurance firms will insure the Palapa-C1 and the Palapa-C2 satellites, which are operated by PT Satelindo, for US$460 million.

The in-orbit-satellite insurance deal was signed yesterday by Satelindo's president, Iwa Sewaka, and PT Asuransi Astra Buana's president, Willy Suwandi Dharma.

Satelindo, through its insurance broker PT Bimantara Graha Insurance Broker, appointed Astra Buana as the consortium's leader.

Willy said the consortium would carry 15 percent of the underwriting risk while the remaining 85 percent would be reinsured to foreign companies.

The consortium's members include PT Citra International Underwriters, PT Asuransi Artha Graha, PT Tugu Pratama Indonesia and PT Asuransi Fadent Mahkota Sahid.

Iwa said the premium was Rp 48 billion for two years.

"The risks guaranteed in the insurance include the satellites' capacity and transponder years," he said.

Iwa said this was the first domestic insurance consortium involved in a satellite project.

The Palapa-C1 was launched on Jan. 31, 1996 and the Palapa-C2 was on May 16, 1996.

They were made by U.S. firm Hughes Space and Communications Corp and have lifespan of 13 years and 34 transponders including 24 C-band, six extended C-band and four Ku-band transponders.

Iwa, PT Jasindo's former top executive, said insurance firms would not participate in the deal if there had not been a "healthy clarification" of the satellites.

PT Jasindo insured the satellites' launches.

Jasindo, in cooperation with Citra International Underwriter and 17 other domestic and foreign insurance companies, insured Palapa-C1 for US$164.88 million, covering the satellite's launch.

The chairman of the Indonesian Insurance Council, Munir Sjamsoeddin, who witnessed yesterday's signing said it was a major step for Indonesia's insurance industry.

"Though the amount derived from the domestic insurance firms is still limited, the deal has shown good will," he said.

Munir said most local insurance firms' net retention was still too small to cover big projects like satellites.

"I hope that more local insurance firms participate in the country's satellite business," he said.

Indonesia, which started its domestic satellite business in 1976, will have several new launches soon.

PT Malicak's Indostar-1 is scheduled for launch later this year, while over the next few years PT Telkom's Telkom-1, PT ACeS' Garuda-1 and PT Pasifik Satelit Nusantara's M2A will be launched. (icn)