ACE Ltd. has taken its first loss in the prestigious satellite insurance market, the Bermuda-based company revealed Friday.

Mr. Charles Rudd, senior vice president with ACE, said the company had underwritten a percentage of the $160 coverage on the Apstar-2 telecommunications satellite, destroyed during its launch by a Chinese rocket Wednesday morning Bermuda time.

But it is the policy of ACE not to disclose how much of a loss they incurred, he added.

"Over the last 14 months there has been a series of (satellite) failures, ACE was not involved (prior to the Apstar-2),'' said Mr. Rudd.

This loss, and the others will likely mean a "contraction of capacity'' in this insurance market as well as "rate increases'', he added.

"(But) the premium we have accumulated is sufficient to cover this loss,'' he added.

ACE last year entered the launch and in-orbit satellite insurance market.

Premium rates for satellite cover run about 20 percent of the value of the satellite.

Built by Hughes Corp. of the United States, the Apstar-2 satellite was to have provided television, telephone and digital telecommunications.

The satellite, owned by the China-controlled firm APT Satellite Co., was to reach viewers from Eastern Europe to Australia, boosting broadcasting across Asia, according to Associated Press.

The satellite and its Chinese-built Long March 2E carrier rocket were destroyed by an explosion about 55 seconds after takeoff from the Xichang Satellite Launching Centre in southwest China.

In its statement, Hong Kong-based APT gave no indication of the cause of the explosion.

It said it would procure and launch a replacement in the near future.

The Apstar-2 is the first satellite loss in 1995.

Single satellite losses can cost insurers over $250 million.