I'm not sure what the estimated failure rate for the falcon 9 rockets were before the most recent launch, but let's assume it was 1 in 27.
So: The insurance company looks at the deal and sees that they have a 1 in 27 chance of having to pay out. Then they ask Orbcomm to pay $10,000,000/27 + profit. Statistically, the insurance company will always win if they make enough deals.
Oh, and I am sure that if NASA offered $1B to anyone who would insure the 50 million tank, there would be an army of takers. ;)
So: The insurance company looks at the deal and sees that they have a 1 in 27 chance of having to pay out. Then they ask Orbcomm to pay $10,000,000/27 + profit. Statistically, the insurance company will always win if they make enough deals.
Oh, and I am sure that if NASA offered $1B to anyone who would insure the 50 million tank, there would be an army of takers. ;)