Akihabara News (Tokyo) — As commercial space travel becomes more accessible and appealing to some members of the public, the provision of space travel insurance is an issue that has come to the fore.
The space travel industry is predicted to achieve significant growth within the current decade, says Australian business management consultant company Milliman. Several estimates reveal that it could become “a US$10-$15 billion industry annually.” Such growth, especially in demand, means that a new market for insurance could be opening up.
Following the record number of civilian space travelers in 2021, three major insurance projects by Japanese companies were revealed to the public earlier this year.
The Japan Aerospace Exploration Agency (JAXA) and Mitsui Sumitomo Insurance are currently cooperating in the creation of insurance products for civilian space travelers. JAXA will be responsible for providing actuarial information, including the causes and likelihood of space mission accidents. Mitsui Sumitomo will then use this data to provide insurance-related expertise to potential customers.
The organizations added that covering the costs of property damage is also being considered in addition to bodily damage travel insurance.
Tokio Marine & Nichido Fire Insurance (TMNF) has also revealed plans to join the space travel insurance market. In April, the company announced that it had entered into a development project with Beazley PLC, a UK insurance company described as “one of the major players in the international space insurance market” by the Japan Space Law Association.
This project will focus on supporting lunar exploration missions, an area in which “risks are still unmitigated, however, no specially-designed insurance products have emerged” to address the challenge, said TMNF in a statement this year.
TMNF will be providing their insurance product to project Yaoki, organized by Dymon, a Japanese aerospace company. If successful, it would become “the first private entity in the world to complete a lunar exploration mission.”
Finally, Sompo Japan Insurance announced in March that it has entered into an alliance with Synspective, a Japanese company specializing in the development and operation of satellites.
Sompo Japan claims that it is motivated by the fact that “space activities are exposed to various risks that we have not experienced on Earth, and there is an urgent need to develop insurance coverage for these new risks.”
The information collected and analyzed from the alliance will allow Sompo Japan to “further enhance and develop its space-related insurance products and services.”
However, the lack of historical data, increasing amount of debris in Earth’s orbit, current expenses in space travel, and the wealth of the most likely customers make providing insurance both complicated and risky.
The National Aeronautics and Space Administration (NASA) reported last year that the amount of orbital debris has increased dramatically over recent years.
This presents several major risks which insurance companies will need to evaluate. Last year, NASA warned that “the rising population of space debris increases the potential danger to all space vehicles, including to the International Space Station and other spacecraft with humans aboard.”
Richard Parker, the co-founder of Assure Space, a unit of AmTrust Financial, told Reuters last year that “it may start to get difficult to get [low Earth orbit collision damage] coverage in the near future as more insurers realize that this is a significant risk that we can’t even get our arms around.”
University of Mississippi Professor Joanne Gabrynowicz mirrored this concern in a statement reported by Space Safety Magazine: “two of the most pressing issues faced by insurance companies hoping to cover space tourism is… lack of a track record upon which a statistical analysis can be made” and “a large enough pool of funds that needs to be available in the event a claim is made for which a payment has to be made.”
Currently, spaceflight companies such as Virgin Galactic and Blue Origin are not legally required to offer any insurance to their passengers.
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