May 27, 2013
On July 21, 2011, Space Shuttle Atlantis landed at the Kennedy Space Center in Florida for the final time and thus ended the US National Aeronautics and Space Administration’s (NASA) 30-year Space Shuttle program. It was one of the most significant developments in the Obama administration’s plan to overhaul NASA and move to a reliance on launch vehicles designed and built by private aerospace companies to send US astronauts into space. Obama has actually committed the US to a manned orbital mission to Mars by the mid 2030s, but he’ll be relying on private sector technology to get there.
The commercial space industry as a whole is growing. The Commercial Spaceflight Federation boasts over 40 member organizations, including spaceflight developers, operators, and spaceports as well as a number of suppliers and vendors to the industry.
Canada plays a significant part in this sector. According to Industry Canada, over 8,000 highly-skilled Canadians are employed at over 200 private-sector space companies and organizations, generating $3.4 billion in annual revenue.
It goes without saying that the development of spaceflight technologies and equipment is also extremely expensive and very risky. For these reasons, insurance plays a critical role in the success of the commercial space industry.
“Without insurance there would be very little investment in space,” explains Mike Vinter, executive vice president of International Space Brokers, a division of Aon. “It’s one thing if you’re a big investment bank, you can put in a chunk of money to underwrite a business plan. But the technical risk of a launch vehicle failing would wipe out your whole investment.”
The following report looks at some of the ways the insurance industry helps the commercial space industry remain viable and even find new opportunities. We’ll also explore how space technology is in turn helping brokers and insurers gain a better understanding of risk here on the ground.
Copyright 2013 Rogers Publishing Ltd. This article first appeared in the February 2013 edition of Canadian Insurance Top Broker magazine.
This story was originally published by Canadian Insurance Top Broker.