Insuring the final frontier
26 July 2007
So far, only astronauts and commercial satellites have gone into space – but that’s about to change.
Stargazers throughout the world are becoming increasingly excited at moves to launch commercial sub-orbital space flights, with the potential for lift-off sometime in 2008.
In the past month, scientists have been calling for volunteers to spend weeks in a replica spaceship as they look at the effects of lengthy space travel on the human body and mind.
And while much remains in the realm of science fiction, this means that the space insurance market is becoming increasingly attractive to underwriters.
Lloyd’s and the London market remain the global centre for space cover, and Peter Elson, Chief Operating Officer for the global space practice at Lloyd’s broker Aon, says the market is getting ever more competitive.
“We have seen some of the major firms sign insurance policies for multi-satellite launches in recent months,” he says. “In recent years there has been some very profitable business in the space market which has in turn seen the arrival of new capacity, and with it the pressure in rates.”
Elson says that currently underwriters have sought to call a halt to rate reductions, but adds that premiums are still at a level which would have been deemed uneconomic some years ago.
“I think it is testament to the increased levels of risk management and safety that is involved with today’s launches,” he says. “Lloyd’s and London remain the home of the majority of space expertise, but there are other insurance centres which underwrite the business.”
But he adds that the emergence of commercial space flights will not prove an issue for insurers.
“Many space insurers will also have aviation operations and as such, in terms of the risks for the likes of Virgin Galactic, the operators will not have too much interest in which area of the underwriter’s business the risk is placed - as long as the risks are covered,” Elson explains.
“Virgin Galactic will open up an exciting new sector for the insurance market, but it will also be operating on a safety level well ahead of the unmanned launches.”
Last updated on 11 Oct 2007
