My colleague here at INN’s Insurance Experts’ Forum, Ara Trembly, just posted an absolutely fascinating piece on the insurance implications of space travel. That is, how do you insure commercial space passengers taking flights suborbitally, orbital or even flinging around the moon? (Commercial flights around the moon are commercially feasible, and could occur in the next 10 years, space industry proponents say. One company is already booking flights—at a mere $100 million a ticket.)
Indeed, such excursions probably require a bit more consideration and underwriting work than standard life or air travel insurance.
I linked to Ara's post from one of my other blogging venues, and heard back from Thomas L. Matula, Ph.D., a leading space commerce consultant on the question of space insurance. Space travel is a matter that has been under exploration, he says, noting that “the space insurance industry has been around for decades, emerging in the late 1970's to serve the needs of the $200 billion dollar space commerce industry.” He informed me that for the last 30 years, the space insurance industry has held a bi-annual conference, and details of the most recent conference are available here.
The next event, the 16th International Space Insurance Conference, will take place in Rome in early April 2011. Matula also provided a link to a summary paper (PDF) of the space insurance industry's history.
The report, put together by Timofeev Aleksandr of the International Space University in Strasbourg, put the current size of the space insurance market has about $1.5 billion. He notes that the market has two segments—launch phase and in-orbit. The most recent figures show that the space insurance market ended the year 2008 in a profit position: premiums were above $900 million, while estimated claims were $397 million.
While Aleksandr's computations seem to involve hardware and payloads—and not passengers as Ara discusses—his market sizing provides some perspective on the opportunities in this budding new frontier.
As Aleksandr concludes: “The space insurance market is yet so small, but important and even necessary for sustainable commercial space activities. ...The market is always have a common trend (due the involvement of big amount of insurance companies, in the insurance of each space risk).”
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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