It’s one thing to insure a car and the liability surrounding it on the road. It’s quite another insuring a space rocket and the liability that goes with that in outer space.
With about 80-90 rocket launches every year, and with that number set to grow massively in the near future, space insurance is an interesting, well, space to be.
Chris Kunstadter, senior vice president and global underwriting manager of space for
XL Catlin, said aerospace insurance covers the full gambit of a rocket’s life.
“In space insurance we offer insurance for the launch phase, for the satellite operations in orbit, we offer coverage for liability associated with space operations, either pre-launch, or during launch or in orbit, we offer pre-launch insurance, so the transportation of the satellite to the launch site and the preparation for launch.
“Anything having to do with the risk associated with loss or failure of satellites and launch vehicles and other space payloads really through the time they’re manufactured all the way through their life in orbit … and for re-entry.”
About half of the 80-90 new launches each year were insured, Kunstadter said. The uninsured launches were typically military or scientific satellites, he said.
There are roughly 2,000 active satellites in orbit, with 500 geo-stationary satellites – which orbit the Earth in time with the planet’s rotation, to appear stationary – and 1,500 in low-Earth orbit. About 40% of geo-stationary satellites are insured, he said, while only about 50 of the 1,500 low-Earth satellites are covered, because those were largely military and scientific offerings.
The low-Earth space is where a huge increase in traffic is expected in the next few years, he outlined.
“Right now the FCC [Federal Communications Commission] has tens of thousands of low-Earth satellites that have been proposed,” Kunstadter said. “It’s a huge, huge developing market with vast, vast numbers of satellites.
“Now will they all end up being launched? Highly unlikely. But there are some companies that are investing a lot of money in new satellite constellations, of 10, or 100, or 1,000, or 10,000 satellites in a constellation. It’s a fascinating field in low-Earth orbit.”
Passenger space travel is another area that stands to grow in the near future, as companies like SpaceX and Virgin Galactic prepare for commercial space travel.
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“People have been talking about commercial human space flight for a long time. I think we’re probably getting close to where it’ll be a reality … on a regular scale. Commercial human space flight is a growing field, it’s an interesting field. It’s not growing as fast as the commercial telecommunications and satellite market but it’s finally starting to get some legs.”
Outer space, though, is loaded with risk. And that’s only going to get more dangerous with more satellites in the air – which is why such importance is now being placed on “space situational awareness”, effectively space traffic control to avoid collisions.
“Space situational awareness, which is knowing what’s up there, knowing where it is, and knowing what you need to do to make sure you don’t collide. That’s a very hot topic, especially with all these new filings with the FCC. You need to know where they are, where they’re going, and how close they are to other objects.”
With an exponential rise in satellite numbers, space insurance is poised to become an even larger field.
“The insurance we write is all-risks insurance. We cover collisions between objects, all else being equal.
There are a lot of objects up there,” Kunstadter said.
“Insurers have sort of been playing the game, assuming space is big and nothing is going to hit. But as soon as we have a ten-fold increase in the number of [new satellite] objects … I think insurers are going to say, OK, this demands a bit more attention. If we’re going from insuring 250 objects in space, to insuring 25,000 objects in space, then obviously it becomes a bigger issue. We insure collisions now, but I think we’re going to be taking a more focussed approach.”
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