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Insurers face loss after launchpad explosion

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Insurers will be bracing for loss claims associated with the explosion of a rocket and its satellite payload on a launch pad at Cape Canaveral in Florida yesterday.

A SpaceX rocket was being prepared for a test firing when it blew up. No one was injured, but the Falcon 9 rocket and its payload, an Amos-6 satellite, were destroyed in the explosion.

The satellite was to be used by Facebook to deliver internet to communities and businesses in Sub-Saharan Africa. It was valued at $200 million, according to Spaceflight Now.

It is the second Amos satellite to be lost in the past 12 months. Israel's Spacecom Ltd operates the Amos series of satellites, and lost contact with the orbiting Amos-5 in November. At the start of this year the company said it expected full insurance payout of $153 million for the lost satellite.

It has not yet been reported which insurers and reinsurers have exposure to the SpaceX rocket and Amos satellite destroyed yesterday.

Aon International Space Brokers is one of the players in the sector, and since it was created has collected more than $3 billion in satellite claims. A spokeswoman said that due to company policy it was unable to confirm client relationships or comment on yesterday's event.

Spaceflight Now reported that Spacecom Ltd had not confirmed if the satellite was fully insured for loss before lift-off, however two industry sources said standard satellite insurance policies should cover risks to the spacecraft during the static fire test.

The cause of the explosion is under investigation. A video shows an initial fireball erupting in an upper portion of the Falcon rocket. The rocket did not appear to be firing at the time.

The static test was being conducted ahead of the scheduled launch, which had been due to take place tomorrow.

In a statement, SpaceX said there had been “an anomaly” on the launch pad. The company was founded by billionaire entrepreneur Elon Musk, who is also CEO of Tesla Motors.

As with the Amos satellites, this is the second major setback within a the past 18 months for the Falcon 9 rocket.

Last June, an unmanned Falcon 9 rocket exploded a few minutes after launching from Cape Canaveral.

Regarding yesterday's loss of the Amos-6 satellite destined to be used by Facebook, the company's CEO Mark Zuckerberg, said in a Facebook post: “As I'm here in Africa, I'm deeply disappointed to hear that SpaceX's launch failure destroyed our satellite that would have provided connectivity to so many entrepreneurs and everyone else across the continent.

“Fortunately, we have developed other technologies like Aquila that will connect people as well. We remain committed to our mission of connecting everyone, and we will keep working until everyone has the opportunities this satellite would have provided.”

Insurance payout expected: the Amos-6 satellite, valued at an estimated $200 million, falls during the explosion of a SpaceX Falcon 9 rocket at Cape Canaveral (Screenshot from USLaunchReport.com)
Spacecraft destroyed: a SpaceX Falcon 9 rocket explodes at Cape Canaveral yesterday. The rocket was carrying the Amos-6 satellite (Screenshot from USLaunchReport.com)

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Published September 02, 2016 at 9:00 am (Updated September 01, 2016 at 9:09 pm)

Insurers face loss after launchpad explosion

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