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)