insurance market, according to a Bermuda-based underwriter.

One loss can severely affect the global capacity of the few companies that write in this highly specialised field, said ACE Ltd. senior vice president Mr. Charles Rudd.

Mr. Rudd is one of a handful of people worldwide who underwrite satellite insurance and one of several speakers involved in the Bermuda Market Briefing: From Captives to Cats, which highlighted the Island's insurance industry, and was held earlier this week.

Worldwide capacity in this line is about $420 million with "normal'' considered to be around $280 million per year, he reported.

With some satellites valued at $300 million, it is easy to see why one event could severely impact on the insurance industry's capacity in this line, he said, adding that capacity could be "stressed'' even further with plans to build a vehicle capable of carrying two satellites into space.

"One of the most extreme cases we've seen was a satellite that `only needed a nudge' to deploy a solar panel array, and since NASA has decided not to repair any more in-orbit satellites, there was no way to help the crippled device -- so the satellites rockets were fired and unfortunately it was sent `into deep space','' he said.

He disagreed with NASA's view that repairing satellites in space is too dangerous.

Losses peaked in 1985 when there were three write-offs while last year the market only took one hit. In 1993 16 satellites were launched.

But there is "a tremendous spread of risk'' today compared to the 1980s when only a few satellites were launched per year, Mr. Rudd said.

The number of launches anticipated for 1995 is 25.

Discussing the loss ratio, he said: "A rough, rough guess...about one in ten to one in 11 don't make it to their destination.'' Of the $300 million written in satellite cover, ACE's chunk of dedicated capacity is $25 million.

The largest underwriter of this type of insurance is the Marchant Group at $60 million.

Mr. Rudd joined ACE early in 1994 and is responsible for the underwriting of launch and satellite insurance policies. He came to ACE from International Technology Underwriters (INTEC), said demand and premiums for this line is "growing very rapidly''.

At renewal time, when the satellite is in orbit, the owner is required to submit a health report on the equipment.

There are currently 11 launch vehicles in the world with two more being built.

"It is essential they (the insureds) secure capacity because they all buy insurance,'' he added.

A satellite can cost from $150 million to $250 million -- "rest assured they all buy insurance'', he noted.

The premium for a $200 million satellite could cost about $40 million, he added.