Commercial Space "Accelerates" How Can Insurance "Keep Up"

In March, China’s commercial space sector faced a “major technical test”: Long March 8A launched 10 satellites into orbit, Kuaizhou 11 Yao 7 completed an “one rocket, eight stars” launch, and several reusable rocket first flights or recovery tests were scheduled intensively. The continuous increase in launch frequency and concentrated validation of new technologies mark that commercial space is moving from early technical verification into a critical transition toward scaled operations.

However, compared to the industry’s rapid pace, space insurance still lags behind. Industry insiders reveal that China’s commercial space industry has surpassed a trillion yuan in scale, but space insurance premiums are only about 800 million yuan, with significant coverage gaps. On one side is a vast blue ocean market; on the other, the industry faces the pain points of “high risk—high cost.” How to address the key shortcoming of risk management has become an important issue to stimulate the vitality of commercial space.

The 2026 government work report for the first time listed aerospace as a new pillar industry and proposed vigorous development of satellite internet, injecting strong momentum into commercial space. Market data from CCID Think Tank shows that by 2025, China’s commercial space market reached 2.83 trillion yuan, expected to grow to 3.5 trillion yuan in 2026, with annual growth exceeding 20%. On the launch side, 92 space launches were completed in 2025, including 50 commercial launches, becoming a significant driver of industry growth.

In stark contrast to the rapid expansion of the industry scale, the penetration rate of space insurance remains low. Shi Hequn, deputy secretary of the board of Ping An Property & Casualty Insurance and director of the group business unit, disclosed that China’s space insurance premiums are only about 800 million yuan. “From the entire chain—research and development, manufacturing, launch, in-orbit operations, to third-party liability—there are still rigid protection gaps.”

This gap manifests in multiple areas. Shi Hequn explains that during R&D, testing risks and prototype losses are not widely covered; during launch and in-orbit phases, insured amounts are often below the actual asset value, especially for high-value satellites and constellation projects; additionally, third-party liability insurance has high premiums, leading to low corporate willingness to insure, while indirect risks like supply chain disruptions and revenue losses lack sufficient coverage.

The root cause of this situation is a vicious cycle of “high risk” in commercial space and “high premiums” in insurance. A single commercial launch often involves investments of hundreds of millions of yuan, and failure can significantly impact a company’s cash flow. Due to rapid technological iteration and scarce historical data, insurers find it difficult to price accurately, resorting to high premiums to hedge uncertainties, which in turn discourages companies from insuring.

Deeper reasons include multiple industry bottlenecks. Industry insiders point out that rapid technological iteration makes risk assessment difficult, and the lack of historical data affects pricing accuracy; high insured amounts and large payouts limit the capacity of individual insurers; moreover, companies’ awareness of insurance is insufficient, and mandatory insurance systems are still being developed. Wang Peng, associate researcher at Beijing Academy of Social Sciences, states that traditional “static actuarial” logic based on low-frequency launches is facing obsolescence— as reusable rockets become more common, hardware aging risks show nonlinear characteristics, but relevant data remains scarce.

In response to the challenges of fast technological iteration and diversified applications in commercial space, insurance institutions are innovating across multiple dimensions to enhance coverage and break the cycle of “high risk—high cost.”

In product innovation, comprehensive insurance covering the entire lifecycle has become a key focus. Recently, Ping An China launched the industry’s first integrated financial solution for commercial space in the Yangtze River Delta, covering core risks such as launch failure, in-orbit failure, supply chain interruption, and third-party liability, achieving a leap from single insurance products to comprehensive financial services. Shi Hequn states that this solution connects multiple institutions including property insurance, banking, and securities, aiming to address the three major pain points of “fear of failure, waiting too long, and slow growth” in commercial space.

For risk diversification, co-insurance models have become an important breakthrough. In March 2025, under guidance from Beijing regulators, 17 property insurance companies, 2 reinsurance firms, and 1 insurance intermediary in Beijing formed the country’s first commercial space insurance co-insurance consortium. According to data from the Beijing Financial Regulatory Bureau, by December 2025, this consortium had provided risk coverage for nearly 7.7 billion yuan across 17 launch projects. This approach effectively disperses risk among multiple institutions and, by leveraging international reinsurance networks, introduces global underwriting capacity, increasing the maximum coverage per project.

Technological empowerment offers new pathways for risk assessment and pricing optimization. China Re P&C independently developed the country’s first proprietary space insurance pricing model; Ping An adjusts premiums dynamically based on a company’s technological maturity and launch history, offering tailored solutions. Shi Hequn believes that as commercial space launch frequency increases and data accumulates, pricing models will shift from static to dynamic, incorporating machine learning algorithms for precise underwriting.

However, relying solely on market forces remains insufficient. Industry experts call for stronger top-level institutional design and ecosystem building to systematically solve the risks faced by commercial space. Suggestions include establishing national or local space risk compensation funds to cover over-claims, creating comprehensive space risk databases to integrate launch and in-orbit data for insurers’ actuarial use, and streamlining international reinsurance transactions through platforms like the Shanghai International Reinsurance Center to attract more global capital.

Policy support is also intensifying. In November 2025, the China National Space Administration issued the “Action Plan for Promoting High-Quality and Safe Development of Commercial Space (2025–2027),” which explicitly states the establishment of a mandatory insurance system for commercial space activities, requiring third-party liability and other commercial insurances, and clarifying the liability of space object owners, launchers, and operators. The implementation of this system is expected to unlock market potential from the demand side and provide certainty for the large-scale development of space insurance.