Preparing for the Worst: The Space Insurance Market's Realistic Disaster Scenarios

Abstract

Abstract Approximately 30 satellite launches are insured each year, and insurance coverage is provided for about 200 in-orbit satellites. The total insured exposure for these risks is currently in excess of US$25 billion. Commercial communications satellites in geostationary Earth orbit represent the majority of these, although a larger number of commercial imaging satellites, as well as the second-generation communication constellations, will see the insurance exposure in low Earth orbit start to increase in the years ahead, from its current level of US$1.5 billion. Regulations covering Lloyd's of London syndicates require that each syndicate reserves funds to cover potential losses and to remain solvent. New regulations under the European Union's Solvency II directive now require each syndicate to develop models for the classes of insurance provided to determine their own solvency capital requirements. Solvency II is expected to come into force in 2016 to ensure improved consumer protection, modernized ...