A satellite property policy is written to survive almost anything except the scenario militaries now plan for. War is listed among the exclusions, and so is cyber.
Tim Rush, a senior partner at broker Gallagher Aerospace, told the MilSat Symposium that military satellites are increasingly viewed as legitimate targets, and that insurers have not built a product for it. “Right now, those are not insurable risks,” he said during Silicon Valley Space Week.
Two markets that never met
Aviation and shipping each run a war-risk market with its own pricing and capacity. Space has no equivalent, and the International Union of Aerospace Insurers spent its annual meeting this year debating whether one is possible. Demand has not appeared, which Rush called a chicken-and-egg standoff.
Even a mature product would carry holes. A policy could cover invasion and hostile acts but would still carve out conflicts involving the US, UK, France, Russia or China.
The clearance wall
The larger obstacle is information. Underwriters price risk by studying a satellite’s architecture, redundancy and margins, and national security programs classify all three. Rush estimates only a couple of underwriters and a handful of brokers hold clearances to read them.
Sponsoring an insurer for a clearance requires a defense contractor on a program of record, a process he described as slow and expensive. He suggested the Space Force’s ACES program could be extended to insurers.
The financial exposure is not abstract. Space insurance has averaged roughly $500M a year in premium, and national security work accounts for under 1% of it. A spacecraft lost in a conflict would fall on the operator’s balance sheet with no backstop.
Rush also told acquisition officials to check a supplier’s insurance before signing. A factory-floor mishap at an uninsured startup can end a company the Pentagon depends on.
