Space insurance blasting off

The UK’s space insurance sector grew by 25% in 2019/2020 and delivered £20m of income for insurers operating in this line of business.

This is according to the Size and health of the UK space industry 2021 report, published yesterday (13 April 2022) by government agency the UK Space Agency.

Launch and satellite insurance, including brokerage, was the second fastest growing area within the space industry, behind space tourism.

Space tourism, meanwhile, grew by 34% in 2019/2020 to generate £1m of income.

Potential for further growth in space insurance is high, with the UK Space Agency’s report showing continued growth across the UK space sector more broadly. For example, the annual growth rate for employment in the sector was 6%.

More than half of the report’s survey respondents expected income, employment, exports, research and development spending and investment in the space sector to be higher over the coming three year period compared to the previous three year period.

The report’s survey received 152 responses from UK-based space organisations. These responses, alongside interviews, were combined with desk-based research, modelling and analysis and internal datasets to inform the report findings.

Getting off the ground

Nicholas Puschman, associate at law firm Linklaters, said that the contribution of space and satellite insurance to the sector’s growth was “not surprising” when considering London’s “well established history in underwriting space risks and responding to the risks presented by new types of activities, such as satellite constellations”.

He added: “Having adequate insurance coverage is a critical step in getting a space project off the ground.

“Investors and lenders will want to know that the risk and potential liability arising from space assets are well covered through insurance.”

Governments generally require space sector operators to have sufficient cover in place before issuing licenses for carrying out space activity.

Puschman continued: “The UK has ambitious goals to develop its space sector, including the development of a domestic commercial spaceflight market, with the first launch anticipated to occur this year.

“It is important that operators looking to seize the opportunities in the UK domestic spaceflight market, including satellite operators and launch providers, understand the legal and regulatory obligations that apply to them, including what level of insurance coverage they may need to obtain.”