Insurance Underwriters in Space at the 2017 World Space Risk Forum

          By Brian Orlotti

The 2017 World Space Risk Forum (WSRF), first organized in 2010 "as a forum for the global space community to better understand space risks, new technologies and innovations with the goal to find ways to best mitigate risks, allowing space to become a safer place to do business," wound up its most recent one day event in London, UK last week with a consensus that the space industry is at a tipping point.

As outlined by SpaceIntelReport editor Peter B. de Selding, "2016 to be historic low for space insurance premiums w/ grounding of SpaceX. But it'll be a profitable yr for underwriters." Graphic c/o Twitter. 

As outlined in the June 15th, 2017 SpaceWatch Middle East post, "World Space Risk Forum 2017 in London – Space: A Risky Business," the industry has entered an era set to be dominated by the small satellites and low cost launch vehicles.To compete, traditional operators, manufacturers and launch vehicle providers will need to rethink their business models.

A second area of concern was the development of solutions for identifying what's in orbit, where its located, who owns it and how to keep everything from colliding.

Presentations included:

• Craig Clarke, the chief executive officer of UK based Clyde Space, who highlighted just how far small satellite capabilities have come. According to Clarke, high resolution imaging, SAR, communications and Earth observation capabilities can all be offered on a small 400kg platform and the cubesat sector is very much driving the continued growth of the overall market. As well, the lower cost of download of data has led to a change in the type of customer using the service and the amount of risk which they are willing to accept.

Sometimes its hard to compare a small-sat to a large one without understanding their orbits and capabilities. A good place to start is the Q2 2015 Intelesat Insider post, "LEO and GEO Constellations: 7 Elements to Consider Before Joining the Debate," which defines the key points of comparison as being latency, coverage, efficiency, complexity, cost, frequency spectrum, time to market and adaptability. Graphic c/o Intelesat. 

• Antonio Abad, the chief technology office of Madrid based Hispasat, who stressed that the satellite industry needs to be competitive with terrestrial solutions in order to maintain its market. The satellite industry, though adept at broadcasting, needs to be better at point-to-point services and needs to look again at the design of its satellites in order to remain relevant.

• Peter Elson, the "global head of space" and chief operations officer at London, UK based insurance broker JLT Specialty, who emphasized that what had previously worked for insurers and brokers in the past would no longer work due to the amount of innovation and disruption currently occurring within the industry.

• Mike Lawton, the founder and chief executive officer of UK based Oxford Space Systems, who explained how NewSpace companies are far more accepting of high risk activities because they are composed of small, "generalist" teams involved in multiple roles and intent on "disruption," not simply "innovation." Traditional players, such as space agencies and aerospace contractors, tend to be risk averse, slower to react to challenges and focused on incremental improvements, rather than disruption.

SpaceX and Blue Origin aren't just competing against each other. As outlined in the June 19th, 2017 Inverse post, "SpaceX and Blue Origin are Set to Solve America's Rocket Problem," they're also competing against far more expensive American rocket manufacturers and 1970's designed Russian rocket engines. Photo's c/o Business Insider. 

• Jonathan Hofeller, the vice-president of commercial sales for Hawthorne, CA based SpaceX, who recounted how the industry had originally laughed at Elon Musk’s vision of reusable rockets. The company has since seen a "paradigm shift" in terms of customers interested in this area and Musk's vision is now becoming the "new normal."

In addition to their conferences, the WSRF provides a platform for continual dialogue and the website provides resources to better understand the space risks industry. 

Partners include Euroconsult, Arianespace, Boeing, Space Systems Loral (SSL), SpaceX, Thales Athena and a variety of insurance brokers. 

Brian Orlotti.

  ______________________________________________________________

Brian Orlotti is a regular contributor to the Commercial Space blog.