Dr. Sima Adhya has her sights set on other-worldly coverage. With a degree in natural sciences from Cambridge University, a Ph.D. from University College London and following a stint at U.K. defense and research agency QinetiQ, she joined Torus as Head of Space in 2012. Torus underwrites a broad range of traditional and innovative products within the space sector.

What kind of insurance coverage is legally required of private space flights?

U.S. regulations require that satellites have a certain limit of third-party liability cover, but operators do not have to insure the asset itself. That is up to the risk appetite of the operator. Most government missions do not have asset insurance, while typically commercial missions do. Third-party liability, which Torus provides, is the only cover necessitated by U.S. law, but it is a small part of the insurance for most missions.

How many private space launches take place each year, and how much do those missions generate in insurance premiums?

The space-insurance industry as a whole generates about $800 million in premiums per year. There are about 25-30 insured launches annually; a typical launch will be insured for $300 million with as many as 30 insurers sharing that one risk. This insured amount is enough to procure another satellite and launch it if the previous one fails

What are the components, or lines of coverage, for space-flight insurance?

The main insurance product that we offer is “Launch plus One” insurance, which offers asset cover for the launch and the vehicle's first year in orbit. After the first year, satellites tend to be renewed on an annual basis. We also provide for third-party liability for damage to people or property during launch and while the satellite is in orbit.

The general lifetime of a geo-communications satellite, which orbits at 36,000 kilometers above the earth is 15 years. The limiting factor is generally the amount of fuel on board. These satellites make up the majority of what we insure.

What are the top risks taken into consideration by space-flight insurance products, and what is the scale of their losses?

One of the interesting things about space insurance is that our losses are often catastrophic. In general if something goes wrong during the launch, you lose the entire asset.

The risk associated with collision of satellites is small compared with the technological risk of something going wrong with the equipment on the spacecraft. Events in space are non-correlated with any natural catastrophe that happens on earth. Liability coverage in orbit is not mandatory, but an operator may ask for it.

The space-insurance industry usually receives two or three claims per year. The riskiest part is the launch phase. Once the satellite is separated from the vehicle and the satellite is switched on and tested, the next few months are also quite risky. Afterward, the risk profile falls.

Are there any pricing trends in insurance rates related to space travel, and if so, what are they?

We've seen rates in the space market decline for years because technology has been relatively stable and losses have been relatively low. The space-insurance market currently has a lot of capacity, which creates competition and rates have been declining as a result. If they continue to decline at the same rate, we may get to a point where there is not enough premium for losses that will inevitably occur, and this will not be good for insurers.

—Interviewed by Anya Khalamayzer

Corrected to show that Torus underwrites several products within the space sector.

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