The destruction of the $500 million Intelsat-33e satellite in October 2024 has renewed focus on the challenges facing the satellite insurance market, according to space exploration outlet Space.com.
The satellite, which exploded over the Indian Ocean, was not insured, highlighting a broader trend as more satellite operators choose to launch without in-orbit coverage.
As the number of satellites in space increases, the insurance market is contracting. According to industry figures, there are nearly 13,000 active satellites in orbit but only around 300 are insured against in-orbit incidents. This shift comes amid growing concerns over space debris and rising insurance costs, both of which are putting pressure on coverage decisions.
The financial performance of the sector has also been strained. Losses from satellite insurance exceeded premiums in several recent years, with 2023 alone reportedly seeing around $500 million in claims. Insurers anticipated a recovery in 2024, but early indications suggest losses may have increased further.
Unlike terrestrial insurance, satellite losses often cannot be independently investigated. Determining whether a failure was caused by technical malfunction or external collision remains a challenge.
“In the event of a loss and a claim by the insured, it is almost impossible… to determine the amount to compensate the insured,” said José Luis Torres Chacón, a professor at the University of Málaga, in commented to Space.com.
Regulatory requirements differ across jurisdictions. In the UK and European Union, operators are generally required to insure their satellites. In contrast, US operators are mandated only to hold liability insurance for launches, not for operations in orbit. Companies such as SpaceX typically self-insure, meaning they cover most of their own risks after deployment.
Insurance premiums for satellites also vary widely. Coverage for low Earth orbit satellites can range from $500,000 to $1 million, while geostationary satellites often require $200 million or more. At the same time, many new satellites are smaller and cheaper, launched in large numbers with shorter operational lifespans. These factors have further reduced demand for traditional coverage.
The lack of clear liability in the event of collisions is a growing concern. Spacecraft continue to encounter close calls with debris, including NASA’s Terra and Aqua satellites, which have had to adjust their paths to avoid potential collisions.
Industry observers have raised the possibility of introducing stronger regulatory frameworks to manage risk. “We need rules of the road,” said retired Air Force General C. Robert Kehler, pointing to the need for coordinated oversight of orbital activity.
Without significant changes, both insurers and satellite operators may face growing exposure to losses. As activity in low Earth orbit accelerates, the space insurance market remains under pressure to adapt to a more complex and uncertain risk environment, according to the report.
