Synopsis
The report is developed by the European Union Agency for the Space Programme (EUSPA). It focuses on user needs and requirements in the insurance and finance sectors, particularly in relation to Position Navigation and Timing (PNT), Earth Observation (EO), and secure telecommunications. The document is intended to guide the European Space Programme in developing space-based services and applications, and is periodically updated to reflect changing user needs, market trends, and technological developments.
Market Overview & Trends
Key market trends in the insurance and finance sectors are highlighted, with a special emphasis on the integration and application of Global Navigation Satellite System (GNSS) and EO data. The trends include:
- The integration of satellite data by insurers for enhanced risk assessment and product development, including parametric insurance instruments.
- Adaptation of risk models to climate change.
- Growing importance of EO data for financial institutions, driven by environmental commitments and demands for transparency in Environmental, Social, and Governance (ESG) reporting.
- Use of GNSS data mainly for timing and synchronization in financial transactions.
- Support of applications like natural hazard assessment, risk modeling, and commodity trading through EO data.
- A trend towards increased transparency and data-driven decision-making in both sectors.
Specific applications within the insurance and finance sectors are identified:
- Insurance Applications: Event footprint analysis, parametric insurance, and risk modeling.
- Finance Applications: Commodity trading, risk assessments, and ESG reporting. The report indicates a growing reliance on EO data for risk modeling, parametric insurance, and ESG reporting. An increase in the use of digital and satellite technologies for insurance underwriting and claims processing is also noted.
Policy Regulation and Standards
The report discusses the regulatory environment impacting the use of EO and GNSS data in insurance and finance. Key points include:
- The significant roles of regulatory authorities like the European Commission and the European Banking Authority (EBA) in setting standards and ensuring compliance.
- The absence of direct legislation addressing EO user requirements in insurance and finance, with concerns about privacy and potential reputational risk.
- The impact of GDPR and other regulatory frameworks on the use of remote sensing data.
- The critical importance of timing and synchronization in financial transactions as governed by EU directives and standards like MiFID II and RTS25, highlighting the reliance on GNSS data.
- Vulnerabilities and cybersecurity concerns related to GNSS data use in critical infrastructure.
Summary
The report provides an in-depth overview of current and emerging trends in the use of GNSS and EO data in the insurance and finance sectors. It underscores the increasing importance of these technologies in risk assessment, product development, regulatory compliance, and operational efficiency. The evolving regulatory landscape, along with the need for enhanced data privacy and cybersecurity measures, are also important considerations for stakeholders in these sectors.
