The Last Word
Space Invaders: Recent Private Spaceflights Have Insurers Eyeing New Coverages
The anticipated rise of space tourism and several billionaires’ recent ventures into space have insurers examining products that for the first time would offer bodily injury coverage to spaceflight travelers.
- November 2021
On July 20, Amazon founder Jeff Bezos reached new heights while spending 11 minutes between the Earth's atmosphere and outer space during his company Blue Origin's first crewed launch. While the mission was a risk in and of itself, news reports say Bezos and his two-member crew upped the risk ante by flying into space without insurance.
Insurers have long been offering third-party liability insurance to commercial space operators for property damage to satellites, rockets and unmanned spaceflights in what the Organization for Economic Cooperation and Development reports is now a roughly $800 million annual market. However, industry experts say none is yet offering liability insurance for private space passengers.
But several companies are hoping to soon change that.
Under the brand of XINSURANCE, Prime Insurance Co. hopes to enter the budding space tourism market by providing solutions for space astronauts. For decades, Prime Insurance has been providing customized liability coverages to businesses and individuals who live a lifestyle or participate in activities that make them difficult for traditional carriers to insure. Space tourism is a “risk category where there's a need,” said J. Parker Lindsey, senior vice president, in a statement in June when the company launched a unique mission of its own by offering to insure Bezos and his crew.
NASA astronauts are typically insured by U.S. taxpayers, but Blue Origin, the space company Bezos founded in 2000, isn't legally required to offer insurance to its passengers, reports cite.
Prior to the maiden flight in New Shepard, his company's fully automated rocket, “Bezos said he was unable to get insurance,” said Rick J. Lindsey, Prime Insurance chairman, president and CEO. “XINSURANCE offered to insure him and his crew” against bodily injury if something were to go awry, “but [Bezos] never followed up on the offer,” he noted.
The company's move into the market comes as the space market in general—and space tourism in particular—is expected to grow. in the coming years. Bank of America expects that over the next decade the space industry will triple in size and become a $1.4 trillion market.
Axa XL also hopes to soon begin offering a new line of coverage that would insure bodily injury for space travelers. “However, that type of coverage is more nuanced because we need to carefully bound and understand the specific risks involved in all aspects of human space flight, such as the training regimen, informed consent and waivers, and the mission itself including the launch, flight and landing,” said global head of space underwriting Chris Kunstadter.
Axa XL currently provides coverage for prelaunch and launches, satellites, space stations, and other areas of spaceflight, he said.
NASA astronauts receive life insurance through government programs. Private astronauts, however, must purchase their own coverage—typically about $2 million to $5 million of individual cover—through the traditional market, said Insurance Information Institute spokeswoman Loretta Worters.