Local insurance firm to form satellite risk pool

Local insurance firm to form satellite risk pool

JAKARTA (JP): State-owned PT Reasuransi International
Indonesia (Reindo) will lead a group of local insurance companies
to form a national consortium to tap into the country's growing
satellite operations.

Reindo's president Munir Sjamsoedin said yesterday his company
was inviting Indonesian insurance companies to join the proposed
consortium, which would be named National Satellite Risk Pool.

"The pool will hopefully be completed by next month," Munir,
also chairman of the Indonesian Insurance Council, said.

The consortium was expected to draw about 60 local insurance
companies, he said at a workshop on space insurance held by
Reindo.

"It will enable us to participate in satellite operations not
only in this country, but also the world," he said.

He said Reindo was currently educating more insurance
companies about space insurance, by inviting representatives from
foreign space insurance companies.

Many local companies were still unfamiliar with the
underwriting technics for satellite communications, although
Indonesia was one of the pioneers in this field, he said.

The high retention rate of the satellite business also made it
hard for local companies, with small capital, to participate in
the industry.

"The total underwriting risk of Indonesia's Palapa C.1.
satellite in-orbit, for example, was US$230 million. That's
beyond the capacity of any Indonesian insurance company," he
said.

The planned insurance pool, however, would be able to
significantly contribute to the space insurance market, he said.

"With a $15 million capacity, the pool could take part in
every satellite operation in the country," he said.

Earlier, a consortium of 66 domestic insurance firms led by
state-owned PT Jasindo had agreed to underwrite the Palapa C1 and
the Palapa-C2 satellites, which were operated by cellular
communications operator PT Satelindo, for $460 million.

The consortium will carry 15 percent of the underwriting risk
of the in-orbit satellite, while 85 percent would be reinsured to
foreign companies.

Munir said if the planned consortium was successful, it would
likely insure the country's first direct broadcasting satellite
Indostar-1 of PT Datakom Asia, which is due for launching next
October.

The satellite, renamed Cakrawarta by President Soeharto
yesterday, will be launched from Kourou, French Guiana and is
worth $135 million.

Speaking at yesterday's meeting was Kirby Ikin, the space risk
underwriter of Australia's GIO Reinsurance.

Munir said GIO had agreed to market the pool's capacity in the
international market. (das)