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Space Insurance: The Final Frontier?
1st April 2007
2007 has seen a continues expansion of space insurance capacity.
Two news stories in the early part of 2007 put the topic of space insurance back on the agenda. In late January the NSS-8 spacecraft blew up at launch on the Sea Launch Odyssey Platform in the Pacific Ocean. The satellite and launch vehicle were insured for $256m. That same month, China confirmed that it had destroyed an out-of-date weather satellite with a ballistic missile.
Yet the real story in 2007 for the insurance industry is the continued expansion of space insurance capacity. “The market is very competitive. In 2006 and early 2007 the capacity increased significantly and we have a number of new players”, says Peter Elson, managing director of Aon Space in London.
According to Elson the NSS-8 loss was by no means disastrous. Many risks of this type are spread between insurers. “The market is accustomed to this kind of thing. In itself it was not an enormous blow to the market,” he says.
It would be easy for someone who has no experience of the space insurance industry to view it as glamorous, with James Bond-style technology and spacecraft launches to far off planets. “It’s true to say that it is viewed as a ‘sexy’ part of the industry,” confirms Elson. “It is rocket science! It’s hi-tech, there are a lot of extraordinarily clever people involved and it’s a truly global business. There are a lot of exciting products available, the industry is constantly evolving and we are seeing a period of amazing innovation.”
“Looking forward, we will see approximately 25 satellites launched each year, when in the past the average has been between 15 and 17. The number of satellites in orbit has also increased – with the total now standing at around 140 and growing.”
The concept of space insurance may seem a bit ‘way out’ for many in the insurance industry, but with Richard Branson’s Virgin Galactic looking to launch its first tourist space flights in 2009, it’s a subject that looks set to touch a lot more of us in the very near future.
For anyone with a bit of loose change, the Virgin Galactic web site is taking bookings now. Their website says “With a set payment of $200,000 and a minimum refundable deposit of $20,000 you can now make your reservations to experience the ultimate adventure.”