The NewSpace role in the insurance market. Profitability goals and its regulatory framework challenges

While the space insurance market has broadly been profitable over the past 20 years, the sector has experienced losses for three consecutive years with claims exceeding premiums in 2018, 2019 and 2020. An incentive to revert to profitability might be provided by the NewSpace phenomenon, and by the achievement of a new level of complementary between insurance and mission assurance for the NewSpace sector. Novel insurance formulas would indeed create additional opportunities for the market. Certainly, space insurance would have to find a different level of flexibility on defining terms of the products and services, as well as on conducting the evaluation risk phase, especially due to the rising use of unproven technologies. For instance, it would be beneficial for insurers to be involved from the beginning in the preliminary phase in order to be supportive in the identification of coverage needs. Insurance targeting NewSpace would have to customise the elements and conditions within each milestone, being in line with the coverage requirements. This paper will firstly highlight the regulatory framework regarding insurance for space activities and give an overall picture of the space-related insurance market. Secondly, it will provide an analysis of the impacts NewSpace had and continues having on the space sector and the challenges that poses. Thirdly, it will outline possible responses from a legal perspective. With regards to types of insurance, a distinction is made between property insurance and third-party liability insurance. The former covers the failure of a satellite during launch and in-orbit operations and is covered by space insurers. The latter is mostly based on legal obligations under international and national laws to buy insurance or provide financial guarantee and it is typically covered by the aviation insurance industry. Property insurance is the result of a risk mapping analysis made by launch services providers or satellite operators, and there are not insurance obligations resting upon the space operator or manufacturer. In addition, the increased interest in new space assets and activities, such as commercial space travel, space tourism, suborbital flights, and on orbit servicing will likely have an impact on the space insurance sector.