Forty-seven insured satellites in low Earth orbit (LEO) have a total insured value of $2.8 billion, but collision risk in LEO threatens at least $35 billion of assets — and that number excludes the International Space Station.
“Collision risk is an important consideration in assessing space risk,” Chris Kunstadter, global head of space at insurer AXA XL told Connectivity Business. “Some insurers have withdrawn from LEO, or curtailed their activity, which is not good for the industry,” he added. At most, 8% of assets at risk in LEO are insured, he said.
Although the first launch of any rocket tends to be the riskiest, “we’ve insured plenty of first launches,” Kunstadter said. First launches experience a failure rate of 30%, while the long-term failure rate for rockets beyond the first 10 launches is approximately 4%, according to AXA XL data.
Space safety
AXA XL continues to support kinetic space safety and the monitoring and tracking of space objects, Kunstadter said, adding that responsible space behavior should be the minimum acceptable, not the aspiration.
The basic rules of human interaction define responsible space behavior: tell people where you are to prevent collisions, don’t make a mess, and remediate by de-orbiting the spacecraft after the mission is complete, he said.
Cybersecurity insurance
Satellite operators deploy strong encryption to protect against cybersecurity risk, and manufacturers of laser communications tout the security that optical links provide as cybersecurity concerns grow.
“The space insurance market principally covers first-party risk for satellites during launch and while in-orbit — cyber risks are now generally excluded from these policies,” Patton Kline, U.S. space practice leader at insurance broker and risk advisor Marsh, a subsidiary of professional services firm Marsh & McLennan (NYSE:MMC), told Connectivity Business.
“Marsh has put significant time and effort into developing language with underwriters that is clear and concise while still providing as much cover for cyber as possible,” he said. “Standalone cyber insurance policies for satellites remains a challenge and an area that we would like to continue to develop for the benefit of satellite owners globally.”