Space insurance premiums to rocket
August 2, 2019
By Chris Forrester
The failure of an Arianespace Vega rocket, and its expensive Abu Dhabi-owned satellite, will have a knock-on effect as far as insurance premiums are concerned. Earlier this year the in-orbit failure of a Maxar-built satellite was subject to a $183 million (€164.9m) claim.
Industry sources say that the claim for the Vega failure will be at least $411 million. The problem is that annual premiums for the space industry amount to about $450 million.
“Space insurers have suffered two major claims within the past year and the cost of these losses far exceeds the premiums earned in this sector,” said Nick Brown, group chief executive at insurer Global Aerospace, which is backed by major reinsurers Munich Re and Berkshire Hathaway.
Brown says that insurance premiums will need to rise “significantly”.
Some satellite companies carry their own risks and do not take out insurance. They calculate that their overall success does not warrant paying premiums for insurance coverage.
In order to stay competitive insurance premiums have generally fallen for the space sector, by as much as 75 per cent over the past 15 years as greater reliability has influenced the industry.