The European Space Agency's Business Applications and Space Solutions unit has signed a Memorandum of Intent with Liberty Mutual Reinsurance (LM Re), marking the start of a three-year collaboration.
The partnership will explore how space applications can support the development of parametric insurance solutions for sectors exposed to climate-related risks.
Under the agreement, the two organizations will focus on using satellite data and space technology to design insurance products for agriculture and forestry. The collaboration aims to develop risk models for climate resilience and create faster, more transparent and scalable insurance solutions.
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The partnership comes as the global parametric insurance market continues to expand. Market research cited by Marsh estimates the sector will reach $34.4 billion by 2033, driven by rising climate volatility, improved data quality and growing demand for fast-payout protection.
The partnership will also involve creating opportunities for companies outside of the insurance sector to explore space-enabled applications with Liberty Mutual Reinsurance in support of risk innovation.
Read more: Parametric insurance enters the mainstream as climate risks surge
Ana Raposo, business applications and partnerships officer at ESA, said the agreement will create opportunities for businesses developing space-based solutions for the insurance market across multiple sectors.
"It will create new opportunities for businesses looking to develop commercially viable space-based solutions for the insurance market across multiple sectors, and particularly around agriculture and forestry where climate change is having a big impact," Raposo said. "We are looking forward to our first joint initiative in early 2026."
Victor Bouton, head of science, parametrics and agriculture at Liberty Mutual Reinsurance, said the partnership will enable the development of solutions to address climate change-related risk.
"Through collaboration and forging partnerships outside of the insurance industry, we can develop cutting-edge solutions to meet the everchanging needs of climate change related risk," Bouton said.
The first collaboration will take place on Feb. 12, 2026, when Liberty Mutual Reinsurance will host a workshop with ESA. The event will help data and technology companies understand the challenges involved in assessing wind damage on forestry.
The solutions will focus on the impact of wind damage on global forests in response to demand for transparent, objective parametric insurance products for forest windthrow and related storm loss.
