Final frontier: Is the insurance industry ready for space?

"It sounds crazy"

Final frontier: Is the insurance industry ready for space?

Insurance News

By Daniel Wood

“We have a couple of submissions in from companies that are looking at asteroid mining,” said Joseph Ziolkowski (pictured above). “It sounds crazy but there has been a massive amount of investment into companies that are building technology to mine asteroids.”

It did sound crazy, so Insurance Business asked the Relm Insurance CEO if meant that his Bermuda-headquartered firm is currently providing insurance for space projects.

“We are, yes,” he said.

Ziolkowski said there are companies that have spent more than a decade working on space projects and have managed to raise hundreds of millions of dollars.

“What's really interesting is that as these companies raise more capital the need for insurance is only going to become more relevant,” he said. “That's where we come in.”

Relm also provides covers for the equipment on space stations.

“There is a company that is working on manufacturing technology or equipment that will function on a space station and for that particular company we are providing them with product liability insurance,” said Ziolkowski

IB asked if these space projects are predominantly United States-based.

“It's definitely not just a US initiative,” he said. “Especially now that space is really becoming privatised so you're seeing activity that is certainly more global.”

Space projects, digital assets and alternative therapeutics

According to its website, Relm Insurance is a specialty insurer serving emerging industries, including the space economy, digital assets and Web3, artificial intelligence (AI), fintech “and beyond.”

“We really wanted to be able to launch Relm in support of companies doing really innovative things,” said Ziolkowski.

The company, he said, launched in 2019 and has 50 employees.

“We're building out our core team in Bermuda but we also have employees in other jurisdictions in various capacities in the US, London, one in Europe, and now two in Dubai,” said the CEO.

Ziolkowski said his firm’s underwriting focus areas are digital assets and alternative therapeutics.

“We've now extended coverage to companies operating in these sectors in more than 37 countries around the world,” he said.

Human innovation: a source of  hope for the future?

IB suggested that the world is currently experiencing gloomy times: climate change and conflict are threatening to destroy life as we know it. Does Ziolkowski work with cutting edge industries to risk manage and find insurance coverages for them give him hope for the future?

“It does,” he said. “But I don't want to overstate the significance of what we're doing against things like climate change.”

However, he said his firm’s vision is to make innovation resilient.

“Our mission is to really put our capacity to work to help solve complex risks in innovative industries,” said Ziolkowski. “When I look at the promise of companies building products and services and solutions, utilizing blockchain technology, I see accessibility, cost reductions, transparency and improvements in different aspects of really important industries like financial services, logistics, real estate and healthcare – that don't exist today.”

He said what he sees in these industries is promising.

“When I look at what's happening in alternative therapeutics, I see clear roadmaps and solutions to use important psychedelic compounds to treat things that really aren't well treated today,” said Ziolkowski.

Other innovative industries, he said, have the potential to make “big impacts” on the way we live, trade and travel.

“You look at what's happening in the space economy,” said Ziolkowski. “There are companies exploring space tourism, mining in space, agriculture, manufacturing in space, defense propositions and strategies in space.”

He said governments around the world are looking at new international regulatory frameworks in anticipation of these developments.

“This whole privatized space economy is about to really come to this kind of crescendo and unfold,” said Ziolkowski. “Who knows where it's ultimately going to go? But it's going to yield rapid advancements and changes in the way that we perceive the boundaries of our capabilities on a planet like Earth.”

New risks and opportunities are coming

He said all of these projects need to raise capital, find insurance covers and enter into contracts with traditional manufacturing and technology companies.

“There's going to be cyber risks that have never really had to be contemplated, there's going to be property exposure to, for example, new forms of wind storms that just hasn't really had to be contemplated on planet Earth,” said Ziolkowski.

He said risk management, mitigation and transfer are going to be “a foundational component in the way that these sectors scale.”

“I think it's a really exciting opportunity for us to really start putting our capacity behind these companies,” said Ziolkowski.

Are you an insurance professional involved in cutting-edge, innovative projects? Please tell us about them below.

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