Evolution of space industry insurance
A new space age emerges with myriads small satellites in low Earth orbit, accessible to thousands of companies and individuals. Asset protection for space activities is unique due to specific risk profiles and management considerations. With the emerging maturity of NewSpace, Insurance is becoming a requirement for a growing number of space companies active in LEO as they scale up and take on more traditional contractual and financial obligations. The transition towards a more sustainable and manageable risk environment is vital for the space industry and future access to space, with insurance playing a key role in promoting this transition.
“The commercial space sector is now approaching a phase of regulation and maturation” – says Denis Bensoussan, Lloyd’s, Beazley
GPS reliance and potential risks
The free use of GPS which is primarily a military constellation comes with no guarantee of service for commercial users. There are risks for relying on a single Navigation constellation like GPS and the potential for service disruption if the US government decides to cut access to commercial users. Redundancy in navigation satellite constellations ensures durability and continuity of access, but state-owned constellations primarily address defense needs, posing systemic risks in conflict. GPS disruption due to satellite collisions in MEO could be a more realistic scenario than previously thought due to MEO increasing popularity and competition. Space activities now developing a computational shell around Earth that will support any ground activities and space assets, but risks making low Earth orbit a barrier if not careful.
Space insurance challenges and optimism for future growth
We explore the challenges of regulation in the space industry, including the lack of rules and the need for collaboration to address its growing pains. NewSpace risk management approach is proving challenging for space insurance, with more frequent and severe failures occurring due to the deployment of more ambitious technology and missions. Despite current challenges, Denis Bensoussan is optimistic about the future of space insurance due to growing insurance demands both in quantity and variety and increasing maturity of technology, capabilities and mindset of the industry. Denis emphasises the importance of optimism in the face of these challenges, citing the potential for innovation, collaboration, and growth in the sector.
Space industry unilateral soft diplomacy, regulation, and insurance.
UK government is taking a bottom-up approach to regulation, consulting with industry stakeholders to create smart and modern regulations for the space industry. The UK government is working with the industry to develop a regulatory framework for spaceflight, with a focus on risk management and insurance to ensure safety and sustainability. The industry has taken the first step in setting rules of conduct, and the UK government is working to adapt and tailor monetary requirements to the specific risks involved in spaceflight. Multilateral collaboration and ‘soft power’ are playing a significant role in the evolution of the global space economy and the UK is very well positioned to become a leader of the future space ecosystem
Safe and Sustainable Space – responsible end-of-life and on-orbit servicing
On-orbit satellite servicing, Starship, moon missions, commercial space stations all mean human space flight will become commonplace, and that drives the obligation to guaranty that this development remain sustainable on a long-term perspective. Failsafe satellite disposal is becoming a critical topic with the increasing objects density in LEO Servicing satellites in orbit will be a game changer for safely disposing satellites at the end of their mission life in LEO. Launching without propulsion is a concern, and the insurance industry can play a role in addressing this issue through innovative incentives and regulation.
“Insurance can become more difficult to obtain for satellites launched without propulsion or safe and fast deorbit capabilities, eventually becoming uninsurable.”
The insurance industry has a crucial role to play in making space exploration sustainable and helping humanity manage the planet and its access to space.