Satellite insurers facing $256 million loss.

The satellite insurance industry is facing a possible loss of $256 million after a rocket carrying a satellite exploded during an attempted launch off the coast of California.

The NSS-8 satellite was due to be launched by a Ukrainian Zenit rocket from Sea Launch's Ocean Odyssey launch platform off the south coast of California. The satellite had been built by Boeing for telecommunications company SES New Skies, and was designed to broadcast audio, video data and Internet service over Europe, Africa, the Middle East, India and Asia.

The rocket exploded during the launch attempt on Jan. 30, destroying itself and the satellite. SES New Skies said in a statement it was not commenting on the cause of the loss of the rocket and its payload.

According to Peter Elson, managing director of broker Aon Space, the loss of the satellite and launch vehicle will cost the insurance industry around $256 million. Elson said Boeing insured the satellite itself for $200 million and Sea Launch insured the launch for $56 million.

The satellite insurance market has been bolstered this year by the first new entrant to the industry for a while, after Lloyd's insurer Atrium Underwriting plc announced it would write satellite coverage. Atrium said it believes the profitability of the business had been demonstrated. Atrium intends to write satellite launch and satellite life business.

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