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thewayneIt's an interesting problem. Insurance is a pool of shared risk. We all pay to insure our cars, but only a small number of us will have a loss through an accident or theft and need to make a claim, so insurance companies can be overall profitable.
The satellite insurance industry is a bit different. Take, for example, StarLink. Musk launches 30+ satellites in a single throw, expecting some will fail or won't reach orbit or whatever. He doesn't care. They aren't insured, and more will be going up soon enough to make up the coverage of the ones that didn't make it. And lots of people are having him launch lots of small satellites with the same philosophy. And there is the problem: they're not buying insurance, so while the number of satellites being launched is increasing, the pool is kinda static and not growing.
Enter ViaSat.
The launched an insured billion dollar satellite. Actually, they have a few in orbit. And there was a power supply failure on an absolutely critical subsystem. We're talking a subsystem that if it doesn't work, you've got a gigantic paperweight in orbit that can't do what it was launched for. Why said system was not multi-redundant, I do not know. They have another satellite in orbit that developed an antenna problem and is not working nearly up to spec. Also insured. These satellites could represent legitimate claims of over Seven Hundred Million U.S. Dollars.
From the article: "In 2019, the total losses from satellite claims amounted to $788 million, which overwhelmed the total premiums for the year at $500 million." The next year, three big insurers stopped offering satellite insurance.
What happens when insurance carriers stop offering insurance? Well, you can't buy it if they're not selling it. Do you build and launch a billion dollar satellite if you can't get insurance for it? California has a problem right now with car insurance: extremely hard for people entering the market to get it, or to get above bare minimum coverage at high prices as companies have been leaving the California market. So if your car gets totaled and you and the other guy both have bare minimums, you could be on the hook for a lot of money to get your car replaced if you still have a note against it!
Is space the next frontier? This could put a major crimp in the satellite industry.
https://finance.yahoo.com/news/billion-dollar-satellite-risks-upending-093002573.html
https://science.slashdot.org/story/23/09/04/0149214/how-a-billion-dollar-satellite-risks-upending-the-space-insurance-industry
The satellite insurance industry is a bit different. Take, for example, StarLink. Musk launches 30+ satellites in a single throw, expecting some will fail or won't reach orbit or whatever. He doesn't care. They aren't insured, and more will be going up soon enough to make up the coverage of the ones that didn't make it. And lots of people are having him launch lots of small satellites with the same philosophy. And there is the problem: they're not buying insurance, so while the number of satellites being launched is increasing, the pool is kinda static and not growing.
Enter ViaSat.
The launched an insured billion dollar satellite. Actually, they have a few in orbit. And there was a power supply failure on an absolutely critical subsystem. We're talking a subsystem that if it doesn't work, you've got a gigantic paperweight in orbit that can't do what it was launched for. Why said system was not multi-redundant, I do not know. They have another satellite in orbit that developed an antenna problem and is not working nearly up to spec. Also insured. These satellites could represent legitimate claims of over Seven Hundred Million U.S. Dollars.
From the article: "In 2019, the total losses from satellite claims amounted to $788 million, which overwhelmed the total premiums for the year at $500 million." The next year, three big insurers stopped offering satellite insurance.
What happens when insurance carriers stop offering insurance? Well, you can't buy it if they're not selling it. Do you build and launch a billion dollar satellite if you can't get insurance for it? California has a problem right now with car insurance: extremely hard for people entering the market to get it, or to get above bare minimum coverage at high prices as companies have been leaving the California market. So if your car gets totaled and you and the other guy both have bare minimums, you could be on the hook for a lot of money to get your car replaced if you still have a note against it!
Is space the next frontier? This could put a major crimp in the satellite industry.
https://finance.yahoo.com/news/billion-dollar-satellite-risks-upending-093002573.html
https://science.slashdot.org/story/23/09/04/0149214/how-a-billion-dollar-satellite-risks-upending-the-space-insurance-industry
