Reed Smith Client Alerts

Key takeaways

  • Participants in the satellite insurance market are facing unique challenges, including extreme premium volatility, rapid advancements in satellite technology and recent high-profile insurer exits. Orbital debris (and the associated risk exposure of both insurers and satellite operators) also continues to accumulate in orbital regimes.
  • However, developments in adjacent industries (including in-orbit servicing) and the potential for governmental and legislative support offer hope for a brighter, more stable future for the market.
  • The article also explores the important distinction between satellites operating in low Earth orbit and geostationary orbit, as well as the typical models of satellite insurance.

Authors: Laura-May Scott Daniel Sahraee

The final frontier: satellite insurance

On 4 October 1957, Sputnik 1 became the first satellite to orbit the Earth, transmitting a radio signal for about three weeks before re-entering the Earth’s atmosphere and kick-starting the Space Race. Nearly 70 years later and the United Nations Office for Outer Space Affairs has documented nearly 20,000 objects launched into space, with over 10,000 of these being satellites that remain in active service.

Despite the immense advances in technology since the launch of Sputnik 1, the satellite industry continues to face significant risks and uncertainties, not least in its need for insurance coverage.

We explore the satellite insurance market and the ongoing challenges faced by policyholders, and offer a positive outlook for future developments.