Synopsis
Here is a summary of the key points from the Astroscale paper on in-orbit servicing and insurance markets:
- The space industry is entering a new era of in-orbit servicing (IOS) enabled by technological advances and influx of private capital. However, space debris poses a major threat, with over 8,500 active satellites and 1 million debris objects in orbit.
- IOS provides a solution through active debris removal and other sustainability measures. The UK is linking its space industry with finance/insurance expertise in the City of London to tackle this problem.
- Astroscale has partnered with the insurance community to explore products like a “space P&I mutual” and “space debris retrieval bonds” (SDRBs) to incentivize debris removal.
- A space P&I mutual would allow satellite operators to pool risk and resources like the shipping industry does. However, challenges include high startup costs, need for reinsurance, and satellite operator hesitation.
- SDRBs would guarantee funding for end-of-life deorbiting/retirement of satellites. This aligns incentives between satellite operators and insurers to minimize debris. SDRBs leverage insurers’ experience with performance bonds.
- After consultation, SDRBs appear more feasible than a space P&I mutual. The City of London will host discussions on SDRBs from 2023-2024 called the Space Protection Initiative.
In summary, the paper proposes SDRBs as an insurance-linked financial product to incentivize satellite operators to responsibly deorbit satellites and tackle the space debris problem. This aligns the satellite and insurance industries and draws on the UK’s financial expertise.
