Insurance companies safeguard commercial spaceflight heading towards the stars and the sea

Byline: Leng Cuihua, Yang Xiaohan

At the beginning of this year, the financing boom in the commercial space sector has surged. In February, multiple companies—including Starlink Glory, Jianyuan Technology, and Xinghuo Space—successfully completed rounds of financing one after another. The dense deployment of capital has accelerated the pace of building liquid launch vehicles, reusable technologies, and end-to-end industrial chains.

Under the dual drive of policy and market, commercial space is speeding up its leap beyond the single-track model led by “government-backed teams,” entering a diversified development模式 in which market-based players actively move in. However, as the industry’s map expands rapidly, the risk exposure across launch and operations has also grown. Faced with high trial-and-error costs, commercial space’s rigid demand for risk hedging is rising quickly.

Against this backdrop, commercial space insurance has been assigned a higher mission. Multiple interviewees said that China’s commercial space insurance is still at an early stage, and the practical pain points of “low coverage shares, high premium rates” urgently need to be addressed. The way to break through lies in abandoning the traditional mindset of “paying after the fact” and shifting to full-cycle management of “shared risk oversight + shared data construction + industry empowerment.” This is not only a self-innovation of the insurance industry, but also the only path to safeguarding high-quality development of commercial space.

A Just-Need for Risk Hedging in a Multi-Trillion-Yuan Market

In recent years, China’s commercial space industry has maintained rapid growth. The top-level policy support system has continued to improve, injecting strong momentum into the sector and opening up broad market space for commercial space insurance.

At the macro level, The CPC Central Committee’s Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development lists aerospace and aviation as a strategic emerging industrial cluster. In November 2025, the China National Space Administration specifically established a Commercial Space Department. It also mentioned, in the National Space Administration’s Action Plan for Promoting High-Quality and Secure Development of Commercial Space (2025–2027), the establishment of a compulsory insurance system for commercial space activities.

In terms of industrial layout, China’s development space for commercial space continues to expand. From December 25 to December 31, 2025, China submitted to the ITU (International Telecommunication Union) applications for frequency and orbital resource access for 203k additional satellites.

Policy tailwinds combined with market expansion have driven commercial space toward explosive growth. Data from the China Business Research Institute shows that from 2020 to 2024, China’s commercial space industry output value grew from 1 trillion yuan to about 2.3 trillion yuan. Meanwhile in 2025, China executed 92 space launches in total, of which 50 were commercial launches; for the first time, the share of commercial launches exceeded 50%.

The rapid expansion in industrial scale also means that launch risk and complexity are rising in tandem. With the need for risk hedging becoming more urgent, the “stabilizer” role of commercial space insurance is becoming increasingly prominent.

A relevant person in charge at China Property & Casualty Insurance Co., Ltd. (hereinafter “PICC P&C”) told Securities Daily that insurance is an important production factor in the commercial space industry chain. By means of a professional loss-compensation function, it provides stable support for enterprises’ ongoing reproduction and production. Insurance can provide a bundled set of solutions for the entire industry chain, including property, personnel, liability, and cargo transport.

Not only that, insurance also creates a multiplier effect in supply-chain coordination and at the financing end. Jiang Han, a senior researcher at PanGu Think Tank (Beijing) Information Consulting Co., Ltd., told Securities Daily that insurance is not only a backstop tool for risk, but can also promote upgrades to the supply chain. For example, requiring satellite manufacturers to purchase quality liability insurance would push them to improve product reliability. At the same time, risk data accumulated by insurers can also feed back into technological iteration, ultimately forming a closed loop of “insurance—data—improvement.”

Yang Fan, general manager of Beijing Pailipaiwang Insurance Brokerage Co., Ltd., added that insurance can also effectively enhance companies’ financing credit. In financing, satellite assets often have characteristics such as high value, high risk, and difficult regulation, making it hard for traditional financial institutions to use them directly as collateral. A well-developed insurance solution can cover risks across the full lifecycle of both satellite launches and on-orbit operations, turning satellite assets into qualified collateral that banks can accept. This “insurance + financing” model has been widely applied within the industry, helping multiple companies complete large-scale constellation networking through bank loans.

Co-insurance and Reinsurance Join Forces to Disperse Risk

Given the characteristics of commercial space underwriting targets—high value and high risk—the insurance industry mainly adopts “grouping” models such as co-insurance and reinsurance to combine efforts and disperse risk.

Co-insurance is the first transfer of risk: multiple insurance companies jointly provide coverage for the same underwriting target, jointly sharing the risk. Reinsurance is the second transfer of risk: it means that an insurer partially transfers the insurance business it has assumed to other insurers in the form of reinsurance, further dispersing its own risk.

From practice, in March 2025, under the guidance of relevant regulatory authorities in Beijing, 17 property-and-casualty insurance institutions, 2 reinsurance institutions, and 1 insurance intermediary institution in the Beijing area jointly formed the country’s first commercial space insurance co-insurance pool—“Beijing Commercial Space Insurance Co-insurance Pool.” This means that China’s commercial space insurance risk-sharing framework has entered a new stage of professional development.

A relevant person in charge at the Beijing Office of the National Financial Regulatory Administration said that, in terms of organizational structure, the above co-insurance pool adopts a two-tier system of “direct insurance + reinsurance” to ensure that overall underwriting capacity is steady, reliable, and sound. On the basis of setting entry thresholds, it dynamically adjusts the member structure to flexibly match the risk characteristics of different space projects and insurance resources. In terms of the service system, it provides one-stop insurance solutions for space enterprises through a linked model of “P&C insurance + intermediaries.”

According to data, since it was established in March 2025 until the end of that year, the Beijing commercial space insurance co-insurance pool had provided risk protection of nearly 7.7 billion yuan for 17 space launch projects.

A “Low Coverage Share, High Premium Rate” Dilemma Awaiting Solutions

Although the market outlook is broad, commercial space insurance still faces many constraints in real-world implementation.

According to Yin Yao Peng, general manager of the Important Clients Department at China United Property & Casualty Insurance Co., Ltd., the company’s commercial space insurance currently mainly has two categories: first, satellite insurance, covering launch and initial operations insurance as well as on-orbit life insurance; second, rocket insurance, including pre-launch insurance, launch insurance, and third-party liability insurance for satellite-rocket launches, comprehensively covering risks across the whole process—from pre-launch commissioning to on-orbit operations.

A relevant person in charge at PICC P&C said that during the development of China’s commercial space, various types of risks will gradually become evident, with challenges and opportunities interwoven. On the one hand, low-orbit satellite constellation networking is accelerating, and dense first flights of high-capacity reusable rockets are increasing, bringing space launches into a high-density, normalized stage. Technical iteration compresses verification cycles, and unknown risks brought by multiple innovative technologies continue to expand. On the other hand, supply-chain diversification increases the difficulty of quality control; new risks keep emerging, such as collisions involving space debris and risks related to landing-zone safety. These risks show the characteristic that “the more aggressive the technological innovation, the more complex the risk chain,” posing considerable challenges to the co-insurance pool’s underwriting capacity and risk prevention and control.

A relevant person in charge at Sunlight Property Insurance Co., Ltd. (hereinafter “Sunlight P&C”) told Securities Daily that pricing commercial space insurance involves substantial actuarial difficulty. In addition to the core explicit risk of launch failure, insurers also need to fully consider implicit risks such as on-orbit operational failures, collisions with space debris, cyberattacks, and information security. The uncertainty of various risks increases the difficulty of pricing products, and also sets higher requirements for insurers’ risk assessment capabilities.

With multiple factors combined, China’s commercial space insurance market to a certain extent has encountered the awkward situation of “low coverage shares, high premium rates”: the insured amount provided by insurance is far lower than the actual construction cost of rockets and satellites, while enterprises’ insurance premium costs remain high.

The above-mentioned relevant person in charge at Sunlight P&C analyzed that behind the phenomenon of “low coverage shares, high premium rates” there are multiple reasons. First, risks are highly concentrated; insurers’ net retention capacity in China is limited. To guard against the pressure of large-scale claims, they can only adopt defensive strategies of reducing insured amounts and raising premium rates. Second, the industry still lacks unified risk assessment standards and information-disclosure mechanisms, making it difficult for insurers to accurately “profile” risks, so they can only price conservatively. Objectively, this reflects that the market is still at an early stage.

From “Paying After the Fact” to “Shared Risk Management”

Faced with the various limitations of the early-stage market, commercial space insurance urgently needs deeper integration with the industrial chain, upgrading from a single “paying after the fact” model to “full-cycle risk management.”

Yang Fan emphasized that the value of insurance should not only be about being the “payer” after an accident occurs; it should be reflected more in front-end risk early warning. By establishing underwriting and risk-control standards independent of R&D testing, insurers can identify hidden hazards in the manufacturing process. This mechanism of “using insurance to promote R&D and using insurance to promote improvements” can reduce the probability of risk at the source.

A relevant person in charge at PICC P&C also told the reporter that in the commercial space insurance field, there is a prominent cognitive bias at present: overly equating insurance with a “risk-transfer” tool, focusing one-sidedly on premiums and insured amounts while ignoring the strong correlation between premium rates and indicators such as rocket reliability and number of launches; and ignoring that insurance is a full-cycle, long-term risk management tool. To break the deadlock, it is necessary to clearly define insurance’s positioning as a long-term risk management tool and build a coordinated model of “shared risk oversight + shared data construction + industry empowerment.” Through deep binding, it helps enterprises improve risk controls, accumulate data, and iterate technologies, ultimately achieving a win-win outcome.

Looking ahead, a relevant person in charge at Sunlight P&C said that as the industry matures, risk data accumulates, and industry standards improve, insurance pricing will inevitably move toward greater refinement and differentiation. At the same time, as domestic enterprises take on more international launch orders, China’s commercial space insurance services will also accelerate “going global,” deeply participating in global reinsurance systems. While aligning with international standards, it will continue to enhance international discourse power.

(Editor: Qian Xiaorui)

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