Space Insurance Market Size, Share & Growth

Overview

MarketsandMarkets: The global space insurance market size is projected to grow at a CAGR of 6.5% from 2024 to 2029. The increased launches of satellite for application including communication, earth observation, and surveillance are driving the growth of the space insurance market.

The space insurance market is now a must-have element of the international space industry focused on the financial backing of high value space objects required for carrying out a mission in space. This market is specifically designed to cover the losses encountered during different stages of a mission such that satellite operators, manufacturers, and launch service providers do not incur potential losses. Pre-launch insurance is provided for design, manufacture, test, transport, and integration processes of space assets such that stakeholders are safeguarded from damages following technical inadequacies or accidents prior to launch. Launch insurance provides protection against risks involved in the most vulnerable phase during a mission, the time from liftoff to payload separation, in case of a failure such as a rocket malfunction. Once the payload is operational, in-orbit insurance takes over and protects the asset throughout the duration of its service in outer space and protects against collisions with space debris, technical and power failures. Once the payload is operational, in-orbit insurance takes over, covering the asset throughout its lifecycle in space, addressing risks like collisions with space debris, technical malfunctions, or power failures.

Apart from these mission risks insurance, property insurance protects ground infrastructures including launch pads, test facilities and control stations from destruction by natural elements or from operational accidents. Also, the third-party liability coverage provides protection against such claims from operators which may arise due to damage caused to other space assets, ground facilities or the public during the launch or operational phases, thereby ensuring conformity to international frameworks. Each of these coverage types is developed in a thorough manner to cope with the intricacies of the space missions thereby making space insurance an imperative tool to mitigate financial risks in this industry with huge stakes.

In terms of geography, North America and Europe take up the largest share owing to the availability of developed space agencies, launch service suppliers, and the satellite manufacturers. Though, territories such as the Asia-Pacific region, as well as the Middle East, are up and coming as important regions because of their growing expenditures on space programs as well as space-based assets. The market is shifting with changes in reusable launch vehicles and small satellite constellations as well space tourism, which creates different types of risk from the growing demand for bespoke insurance coverages. Some of the events which have occurred recently, for example in 2023, insurance claims made were grossly over and above premiums collected, points to the pressures being faced in the market, which have included heavy losses from disasters such as the ViaSat-3 Americas, Inmarsat 6-F2 satellites. There has been an increase in premium rates as a result, whereby the coverage for geostationary satellite launch has been raised to about 10% of the total insured amount. Also, since the number of space launches is expected to go up, the loss margin for the other insurance companies is also expected to increase. Such changes illustrate the pivotal importance of the market in facilitating the growth and development of the space industry but at the same time, it points to the growing problems tied to managing risks within a rapidly evolving and growing sector.

Space Insurance Market Dynamics

Driver: Increasing Satellite Launches and Space Exploration Activities Driving Space Insurance Market

The rapid increase in satellite launches, the development of privately-owned space, and the pursuit of additional planetary missions raised the level of financial risks in all or some operative activities related to space. Moreover, there are possibilities of launch failures, orbital collision, damage from space debris, and also a complete failure of mission. Unfortunately, space insurance is a necessity to alleviate these risks and make these highly risky endeavors economically feasible.

Furthermore, commercial space tourism and initiatives in reusable launch vehicles also expanded the scope of space insurance and caused demand for new products aimed specifically at ensuring the safety of passengers and assets. Further, the increasing participation of developing countries with the deployment and exploration of satellites tends to increase the need for insurance in the fair amount to protect the investments.

In return, these companies are addressing these demands by creating specific insurance policies such as launch insurance, in-orbit insurance, and insurance against third-party damage's liability, which at the moment of time are relevant in the field of space industry, which is characterized by complexity and a rapid pace in the advancement of technologies. Thus, this trend is likely to accompany the healthy growth of the market in the future.

Restraint: High Costs and Limited Coverage Options

The high prices associated with space insurance plans, combined with the limited standardized coverage options, provide a substantial problem for smaller space businesses. Furthermore, the unpredictability of space missions and a lack of previous data make insurers reluctant to give competitive rates, limiting market expansion.

Opportunity: Expansion of Commercial Space Activities

The increased commercialization of space operations, such as satellite deployment, space tourism, and reusable rocket technology, opens lucrative potential for insurance. These advances necessitate bespoke insurance plans to handle specific risks, such as launch failures, in-orbit damage, and liability for third-party collisions, which drives innovation in insurance products.

Challenge: Managing Risk in Evolving Space Technology

The fast advancement of space technologies, such as reusable rockets and advanced satellites, poses issues for insurers in effectively identifying and underwriting risks. Due to the dynamic nature of these technologies, insurers must constantly update their risk models to assure adequate coverage without incurring unsustainable losses.

Based on platform, the satellite segment registers highest market share and growth during 2024-2029

Based on platform, the space insurance market has been segmented into satellite, spacecraft, and space launch vehicles. Among these the satellite segment dominates the market throughout the forecast period and projected to grow at highest CAGR during 2024-2029. This dominance is due to the growing satellite launches for commercial and military communications across the developing countries.

The commercial end use segment projected to grow at the highest CAGR during the forecast period.

The space insurance market has been segmented based on end use into commercial, government & civil, and defense.

The commercial segment witness strong growth during forecast period owing to rising satellite deployments for broadband, IoT, and Earth observation, alongside the rapid commercialization of space tourism by companies like SpaceX and Virgin Galactic.

The North America region is estimated to contribute the largest share in 2023.

North America is expected to have the highest share in 2023, owing to its leadership in space exploration, satellite deployment, and commercial space initiatives. The existence of significant actors such as SpaceX, Blue Origin, and NASA generates a large number of launches, necessitating adequate insurance coverage. Furthermore, the region's excellent infrastructure, including launch facilities and industrial hubs, enables regular missions.

Key Market Players

Some major players in the space insurance market are AXA XL (US), Munich Re (Germany), Marsh (US), Lloyd’s of London (UK), BEAZLEY (UK).

Recent Developments

• In November 2024, the US-based startup Charter plans to use AI technology to streamline the creation of space insurance policies for various space assets.
• In May 2024, TATA AIG rolled out new insurance products to meet the needs of the country's rapidly growing space sector. This offering, called the Satellite In-Orbit Third-Party Liability Insurance policy, aims to provide financial protection for satellite operators and manufacturers.
• In June 2024, independent insurance broker Lockton launched a new global space practice. This initiative will deliver a variety of products specifically designed to meet the unique needs of clients in the space industry, covering areas such as transit and pre-launch, launch and initial in-orbit, subsequent in-orbit, space third-party liabilities, and loss of revenue.
• In April 2023, Tokio Marine introduced a Satellite In-Orbit Third-Party Liability Insurance policy in collaboration with Axelspace, providing financial protection for satellite operators and manufacturers. This effort supports the expanding space industry with customized risk management solutions.

Frequently Asked Questions (FAQs) Addressed by the Report

1. What is the current size of the space insurance market?
2. Who are the winners in the space insurance market?
3. What are the factors driving the growth of the market?
4. Which region is expected to hold the highest market share in the space insurance market?
5. What are the strategies adopted by the key players in the space insurance market?

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