Commercial space opportunities
Demand for space and satellite services continues to grow, while the space industry is becoming more global, according to Clive Smith, Head of Space at Aon. At the same time, emerging low-cost space launch and satellite technology is all set to make space more accessible and more cost effective in the future, he says.
Historically, the space industry has been dominated by government space agencies and commercial satellite services, mostly for satellite TV and mobile data. However, the industry is evolving, according to David Wade, Space Underwriter at Atrium Space Insurance Consortium.
“Miniaturisation of technology has seen the capabilities of small satellites increase tremendously and the commercial sector is now also starting to recognise the potential of small satellites,” he explains.
The next frontier
The growing popularity of smaller satellites - and an interest in space tourism - is helping fuel the development of low-cost spaceplanes. These are typically re-usable sub-orbital vehicles that look and operate more like an aircraft than a vertical take-off rocket.
Virgin Galactic and XCOR have spaceplanes in the pipeline, while UK-based Reaction Engines Ltd eventually plans to use its advanced rocket engine technology in SKYLON, an unpiloted, reusable spaceplane.
“Using an air-launch system such as this means you don’t need a launch pad, instead, all you need is an airport with a sufficiently long runway to be able to accommodate the carrier aircraft. It is this type of technology that we are most likely to see being used to launch satellites from the UK,” says Wade.
A space port is more likely to service low orbit spaceplanes rather than the large rockets, and so would have similar risks to an airport, explains Smith and Wade.
From a legal and insurance perspective, there is no reason why launches could not take place from the UK, according to Wade. “What is needed is a large downrange area which is uninhabited, so it is likely any launches taking place from the UK would see the carrier aircraft heading out over the ocean,” he says.
Insuring space ports
The Lloyd’s market has already insured commercial launchers, including test flights and third party liability cover for many of the launch service providers including the likes of Virgin Galactic and Space X, says Smith. The market has also insured space tourists en route to the International Space Station, and consider that it has all the expertise required to insure space tourists leaving from a UK space port in the future, he says.
In addition to launch and satellite insurance, launch service operators would also likely require third party liability insurance, although this would need to recognise the new technology and launch sites to be used, says Wade.
Space ports are also expected to need their own cover. This would likely be an extension of that currently provided to airports but would need to take into account some new elements unique to spaceports, such as the storage of more exotic propellants, explains Wade.
The development of spaceplanes and space ports should be good news for Lloyd’s underwriters, although there are some wider implications for underwriters to consider, according to Wade and Smith.
Lloyd’s is well placed to underwrite space ports and spaceplanes because the market has the expertise and the capacity in both space and aviation risks, according to Smith. However, spaceplane insurance might require a new approach – launches are currently insured on a flight by flight basis, but spaceplanes could be more suited to an annual policy style of insurance like that used in the aviation sector, he says.
The number of space risks launched each year is very small, so any increase would be beneficial to insurers, explains Wade. However, space debris is of growing concern and launching more small-satellites to the already crowded low Earth orbit is expected only to exacerbate that problem, he says.
Spaceplanes are not the only development that could have come straight from the pages of a science fiction novel. For example, Mars One aims to establish a colony on the red planet by 2025, while two ventures plan to mine asteroids, and Bigelow Aerospace is looking to put inflatable habitable space stations into orbit.
Such ventures are not far enough advanced to require insurance yet, although some do maintain contact with the insurance market as they develop their plans further, says Smith.
The commercial sector is trying to push into areas such as asteroid mining that would have previously been the preserve of governments, according to Wade “These projects will come to fruition one day, but if the history of space exploration and exploitation is anything to go by, there will be numerous delays and regulatory issues,” he says.