Trillion-Dollar Industry Rushes Toward "Starry Seas," How Aerospace Insurance Provides Protection

Question AI · Why is space insurance falling behind the trillion-dollar industry?

As the 2026 government work report for the first time listed aerospace as a new pillar industry and proposed vigorous development of satellite internet, the commercial space industry is entering an unprecedented golden period of development. However, compared to the rapid growth of the industry, the development of space insurance, which provides protection, has not kept pace.

Recently, industry sources revealed that China’s current commercial space industry has reached a trillion-yuan scale, but the premium scale for space insurance is only about 800 million yuan, with significant gaps in coverage.

Industry experts generally believe that the potential for commercial space insurance is accelerating to be unleashed, but to achieve synchronized development with the space industry, multiple challenges such as risk assessment, data accumulation, and system construction need to be addressed. On one side is the vast “blue ocean,” and on the other side are the industry pain points of “high risk - high cost.” How to fill this critical risk management gap has become an important issue to further stimulate the vitality of commercial space insurance.

The Blue Ocean of Commercial Space Insurance

Space insurance is not a widely familiar type of insurance, but it is the ballast supporting human space exploration and the development of the space economy.

Ping An Property & Casualty Vice Party Secretary and Group Business Director Shi Hequn said in an interview with First Financial that from an institutional perspective, insurance can provide the following core protections for commercial space enterprises: first, asset loss coverage, including accidental losses of physical assets such as rockets and satellites during R&D, testing, launch, and in-orbit operation; second, liability risk coverage, including third-party damage liability during launch, signal interference or debris fall during satellite operation, and other legal liabilities; third, contract performance guarantees, such as risks of breach of contract caused by supply chain disruptions or launch delays.

According to a research report by Zhiyan Consulting, global space insurance premiums in 2024 are expected to be $540 million, a decrease of about 6.9% from $580 million in 2023. QYResearch (Hengzhou Bozhi) predicts that by 2031, the global space and satellite insurance market will reach $585 million, with a compound annual growth rate of 4.30% over the next few years.

China’s space insurance development is closely linked to the development of the national space industry.

Zhiyan Consulting states that in the 1980s, the Long March series launch vehicles undertook international commercial satellite launch services, marking the beginning of China’s space insurance industry. In 1997, the China Space Insurance Consortium was established, and satellite launch insurance became a policy-driven business. In 2004, commercial insurance began to gradually participate in China’s space launch field, entering a stage of commercial development. In March 2025, Beijing’s first commercial space insurance co-insurance organization—the Beijing Commercial Space Insurance Co-insurance Consortium—was officially established.

Industry insiders say that currently, the domestic commercial space insurance market is highly concentrated, with leading institutions such as PICC, Ping An, and China Pacific Insurance dominating the market, forming the main market supply through co-insurance and reinsurance cooperation.

With the accelerated “takeoff” of China’s commercial space sector and policy support, industry experts generally believe that commercial space insurance will usher in new development opportunities.

The “China Commercial Space Industry Development Report (2025)” compiled by Zhongguancun Lingchuang Commercial Space Industry Development Alliance shows that China’s commercial space industry has reached a scale of 2.5 to 2.8 trillion yuan, with an average annual compound growth rate of over 20%, and more than 600 commercial space enterprises.

Continued policy efforts also provide strong support for the development of space insurance. In November 2025, the “National Space Administration’s Action Plan for Promoting High-Quality and Safe Development of Commercial Space (2025–2027)” proposed establishing a mandatory insurance system for commercial space activities. Additionally, a related notice issued by the State Administration of Science, Technology and Industry for National Defense in March 2025 encourages commercial space tracking and control entities to use insurance and other financial products to ensure stable service supply. Multiple policy benefits continue to release market demand.

“Currently, China’s domestic commercial space industry is entering a golden development period, and insurance demand is expected to grow explosively, especially for customized insurance products targeting large-scale constellation networking and commercial crewed spaceflight, which will become new growth points,” Shi Hequn said.

Insufficient Coverage

Despite promising prospects, the reality is also clear.

“China’s current commercial space industry has reached a trillion-yuan scale, but space insurance premiums are only about 800 million yuan, with serious coverage gaps and low demand satisfaction,” Shi Hequn said. The potential gaps in space insurance mainly include: first, experimental risks and prototype losses during R&D are not widely covered; second, the insured amounts during launch and in-orbit phases are often lower than the actual asset value, especially for high-value satellites and constellation projects; third, third-party liability insurance has high rates, leading to low corporate willingness to insure; fourth, indirect risks such as supply chain disruptions and revenue losses are not covered. “From the entire chain—R&D, manufacturing, launch, in-orbit, to third-party liability—there are still rigid coverage gaps, such as risks of key component supply interruptions and early satellite decommissioning.”

Industry insiders believe that one major reason for the low coverage rate of commercial space insurance is high premium rates, which stem from high risks. High risks lead insurers to be cautious, pushing up premiums and creating a vicious cycle of “high risk – high premium – low coverage.”

The deeper reason behind this is that the commercial space insurance industry faces multiple development bottlenecks.

Shi Hequn believes that commercial space insurance faces multiple challenges: first, rapid technological iteration makes risk assessment difficult, and the lack of historical data affects pricing accuracy; second, high insured amounts and high payout risks limit the capacity of individual insurers; third, fluctuations in the international reinsurance market may impact the domestic market; fourth, enterprises’ awareness of insurance is insufficient, and the implementation of mandatory insurance systems still requires time.

QYResearch adds that, besides these factors, space insurance requires underwriters to possess interdisciplinary knowledge, and currently only a few reinsurance companies and brokers worldwide have mature expert teams. Additionally, international rules on space debris mitigation and in-orbit operation responsibilities are not yet perfect, making post-accident liability determination and claims processes complex and potentially legally contentious.

Path to Breakthrough

Industry experts generally agree that to break through the pain points and bottlenecks in commercial space insurance development, multi-party collaboration is necessary. Through innovative models, technological empowerment, and system improvements, the capacity to underwrite can be expanded, risk pricing optimized, and a deeper integration between space insurance and the commercial space industry achieved.

As the core entities, insurance institutions are innovating in multiple dimensions to enhance protection capabilities against the challenges of rapid technological change and diverse scenarios. Shi Hequn suggests developing comprehensive insurance products covering the entire lifecycle, such as experimental insurance during R&D, launch insurance, in-orbit operation insurance, and revenue loss insurance. For example, recently Ping An launched China’s first comprehensive financial solution for commercial space in the Yangtze River Delta, covering core risks such as launch failure, in-orbit failure, supply chain disruption, and third-party liability, matching the full lifecycle risk protection needs of commercial space enterprises.

In risk diversification, co-insurance models are an important breakthrough. The Beijing Commercial Space Insurance Co-insurance Consortium, formed by 17 property insurance institutions, 2 reinsurance companies, and 1 insurance intermediary in Beijing, effectively disperses risks among multiple institutions. According to data from the Beijing Financial Regulatory Bureau released on December 30, 2025, the consortium has provided risk protection for nearly 7.7 billion yuan across 17 launch projects. Insurance companies can also further leverage international reinsurance networks to introduce global underwriting capacity and increase the maximum insured amount per project.

Technological empowerment offers new pathways for risk assessment and pricing optimization. For example, China Re Property & Casualty has independently developed the country’s first proprietary space insurance pricing model; Ping An adjusts rates dynamically based on enterprise technology maturity and historical launch records. Shi Hequn believes that as commercial space launch frequency increases and data accumulates, pricing models will shift from static to dynamic, potentially incorporating machine learning algorithms for precise underwriting.

Meanwhile, industry insiders agree that solving the “high risk – high cost” dilemma in commercial space insurance requires not only market efforts but also top-level institutional design and ecosystem building.

Shi Hequn recommends establishing national or local space risk compensation funds to cover excessive claims risks, boosting market confidence; supporting the formation of industry co-insurance or joint ventures through policy guidance to expand underwriting capacity; building a commercial space risk database to integrate launch and in-orbit operation data for actuarial pricing while ensuring data security; and leveraging Shanghai International Reinsurance Center to streamline international reinsurance transactions and attract more international capital, enhancing domestic underwriting capacity.

QYResearch suggests strengthening research and practice in standardizing space insurance, improving legal regulations, and raising awareness of space risk management to stimulate potential demand for commercial space insurance.

(Originally from First Financial)