With NASA’s space shuttle program ended, commercial space companies are now the ones lining up to take that giant leap for mankind once again.
According to Simon Clapham, space underwriter at Liberty Syndicates, the end to the shuttle program is expected to boost the commercial space sector.
Clapham goes on to say that very few space shuttle missions have been insured since the challenger disaster in 1986. However, new space operators like SpaceX will need insurance.
Lloyd’s of London says that underwriters are now looking to create insurance that would cover third party liability, damage to the shuttle, as well as loss of life for both astronauts and people on the ground. Such commercial shuttle missions have been insured before, including the few tourist flights to the international space station, says Denis Bensousssan, a space underwriter at Hiscox.
With more missions planning on being launched, a more in depth analysis needs to be done on the underwriting for these extremely specialized insurance products.
Hiscox has been in contact with brokers and commercial ventures to develop insurance solutions for the launch vehicles, cargo, crew and individual passengers on commercial space flights, he said.
“Insuring human space travel on commercial systems will represent the ultimate challenge for underwriters but this is something for the longer term when private entities may ferry people on a regular basis into space,” says Bensoussan
Some of the challenges in underwriting these ventures are the increasing number of vessels, launches, launch systems and technologies going into space. With all of these factors coming into play, underwriters will need strong technical approaches to accurately assess the level of risk.
The space insurance market is inherently volatile, and the increased premium volume and greater spread of risk should help reduce that volatility, says Bensoussan. Currently the loss of a dual satellite launch on board an Ariane 5 rocket could cost as much as $700 million and almost wipe out a year’s space premium, Bensoussan says. This could easily bankrupt the insurance companies if both of the above criteria are not met.
Underwriters will want to see flight experience and reliability of both the astronauts going into space as well as the vessel itself, Bensoussan says. As more and more of these commercial missions launch into space, the insurance market will have to constantly adapt and analyze the missions to insure the property and lives involved are sufficiently covered.