The number of insured non-GEO satellites could grow rapidly as new communications and Earth observation programmes come online, but the insurance market remains sceptical of a significant lift from the trend any time soon.
The number of insured non-GEO satellites could grow rapidly as new communications and Earth observation programmes come online, but the insurance market remains sceptical of a significant lift from the trend any time soon.
Data from underwriter XL Catlin shows an uptick in aggregate exposure alongside a surge in LEO satellites over the last several years.
Some of these new ventures, such as Greg Wyler’s 900-strong satellite broadband constellation OneWeb, are looking to launch large numbers of spacecraft on a single rocket. It is these missions, with an aggregation of risk largely outside an operator’s control, where insurance products could be sought to protect investor wallets.
“It’s clear that not all these programmes on paper will come to fruition, but the market will respond and be there to offer the relevant coverage that’s required for the ones that do,” said one broker.
“We suspect that most of the launches, if not all of them, will need to be insured. But once in orbit, and possibly even from the moment they are checked out after separation, these operators may decide that they have enough redundancy, in terms of the volume of satellites they have, to not order further insurance.”
The sheer number of low-cost satellites that these systems are planning make them relatively resilient to individual failures and, unlike their GEO counterparts, the loss of one, two or even 10 spacecraft is unlikely to have much of an impact on the business.
Another factor is that this new space renaissance is largely being driven by wealthy investors who can shrug off the hit of losing a US$10m satellite. When you’re already building 900 satellites, having to construct an extra 50 will not have a huge impact.
“These people have money to burn,” noted one insurer.
The market will have to wait a couple of years to see how much insurance these ventures actually need, and how risk adverse they are willing to be.
The larger GEO communications satellites are set to be the main source of premiums for many years to come, but it is not just the rise of the smallsats that could rock the dynamics of the industry in the future. According to XL Catlin, new applications and technologies, emerging risks, and increasing hazards in the space environment will all stress satellite operators, manufacturers, launch providers, end users, and insurers.
