Lloyd’s of London is going into orbit with its latest insurance launch, announcing that it will be releasing a space insurance policy with the aim of entering a growing industry that could help send its profits to the moon.
The policy will be available through Lloyd’s Under the Lift Space initiative, with policies worth US$25 million (around CA$33.2 million) offered by 18 insurance syndicates operating out of the London insurance market. The initiative will be led by Brit and Hiscox MGA.
The policies will pay out in the event of accidents like exploding rockets, in-orbit collisions or damage to components when they are being transported before a launch. The policies could also cover firms’ third party liability to any tourists who they launch into space, and could increase the level of space risk underwritten at Lloyd’s, which is currently estimated to be between £125 million (around CA$216.4 million) and £150 million (around CA$259.7 million).
Lloyd’s has been active in the space industry for a number of years, writing the first ever satellite insurance policy in 1965. Later in 1984, Lloyd’s insurers paid for the first ever satellite salvage mission.
Lloyd’s predicts that the global space industry’s value will grow threefold by 2040, from US$300 billion today to US$1 trillion, considering the number of private space companies that are entering the sector, such as Elon Musk’s SpaceX.
Lloyd’s is banking that the increased activity will expand the demand for insurance products to limit companies’ losses when things go wrong in outer space. With more than 7,000 satellites schedule for lift off in the coming years, that might be a bet that pays off.
Space insurance is one of the newest types of insurance some companies – even your client's – may eventually need. Here's a guide to space insurance.
