In the overview of this year’s Small Satellite Conference, Jeff Foust showed how the demand for SmallSat insurance was growing due to the contraction in the GEO market. Even the big satellite operators like Planet and Spire, who were pulling back from insurance earlier, have shown their interest on a launch-by-launch basis. In response to this market need, we have created an online insurance service. Our colleague from AON, Mike Vinter, has explained why insuring a SmallSat won’t be a pain of the launch campaign, due to these new algorithms developed collaboratively.
This article originally appeared in the Aug. 27, 2018 issue of SpaceNews magazine and on the SpaceNews website on October 4, 2018. The full version is available here.
“GEO satellite orders are down quite a bit, so we’re looking to get some additional premium income for the space insurance industry,” said Mike Vinter, executive vice president with AON Risk Solutions.
Vinter was speaking at a side meeting during the AIAA/Utah State University Conference on Small Satellites in August in Logan, Utah, the annual gathering of the smallsat community that, like that industry itself, has grown significantly in the last several years. That growth, which contrasts with the contraction in the GEO market, offers new opportunities for insurers, but they recognize the same approaches that work for a small number of large satellites won’t work with a large number of small ones.
In Logan, Vinter announced a partnership with Precious Payload, a year-old startup that seeks to offer booking services for smallsat secondary payloads analogous to buying an airline ticket or hotel room on a travel website. Precious Payload, besides selling rideshare accommodations, will now allow developers to also get a launch insurance quote.
As currently designed, a satellite developer offers just a few basic parameters about their satellite through a form on the website: the size and value of the satellite, the launch vehicle that will carry it and its scheduled launch. “We promise to get back to you with a quote within 48 hours,” said Andrey Maksimov, chief executive of Precious Payload: not exactly the instant quotes that auto insurers offer online, but a far cry from conventional practices in space insurance.
For now, the site only offers launch insurance. “What we’re hoping to eventually offer is post-separation coverage” for some period of time after the satellite’s deployment, Vinter said. Future coverage options could also include transit and prelaunch insurance.
“The benefits here are economies of scale,” he said of this approach to buying space insurance. “It’s simple, it’s easy. You can do it in the middle of the night if you want. It just seems to make so much sense.”
Vinter said later that they plan to use preset rates for launch vehicles but will update those frequently. That’s particularly important as new vehicles, such as small launchers designed specifically for smallsats, enter service. “We want to keep those rates nice and fresh,” he said. “Those new launch vehicles, as they come online, their rates are going to be higher, but they’ll come down with each success fairly rapidly.”