For decades, the space insurance market was built around a relatively simple economic unit: the satellite. Large geostationary assets, built by major manufacturers, launched infrequently and insured largely as balance sheet protection, shaped both underwriting models and market capacity.
That framework is becoming less aligned with how the commercial space economy now operates. For Andrew Bonwick (pictured), VP-product development at Relm Insurance, the growth of low Earth orbit, private capital and commercial space services is forcing insurers to reconsider what they are really being asked to protect.
“The economic unit in low Earth orbit isn’t a satellite, it’s a constellation,” he said.
Historically, Bonwick said, space insurance revolved around expensive geostationary satellites owned by large companies with deep balance sheets. Those assets could be insured individually because their commercial value was largely self-contained.
Low Earth orbit has changed that equation. Launch costs have fallen, more private companies have entered the market and many operators now rely on constellations rather than single assets. That makes traditional spacecraft-by-spacecraft insurance a less natural fit.
“Once you start trying to insure individual satellites, you’re looking at the wrong thing,” Bonwick said. “It’s very much got to be about insuring the businesses.”
The shift is not just technical. A single satellite within a constellation may be replaceable; the continuity of the network and the resilience of the wider business may matter far more.
Bonwick argued that some of the clearest opportunities for insurance now sit downstream, where companies use space-based systems to provide terrestrial services.
Customers, he said, are rarely buying “space” itself. A shipping company wants to know where its vessels are. A mining company wants insight into where to dig. Agricultural firms want better information on crops. The space component may be critical, but the customer is buying a commercial outcome.
“People don’t buy space services,” he said. “People are actually scared to buy space services because they think it’s far away, it’s difficult, it’s risky.”
That distinction matters because it allows insurers to apply established approaches from other technology sectors. If a company is providing data or advice that customers rely on, the exposure begins to resemble professional indemnity or technology liability rather than traditional satellite insurance.
“Those companies that are providing services from space have a competitive advantage if those services are backed by insurance,” Bonwick said.
The next phase of commercial space activity could stretch the market further. Bonwick pointed to in-space manufacturing, including pharmaceutical production and life sciences applications, as an example of how quickly the risk profile is evolving.
Much of that activity still depends on the International Space Station. But as the ISS approaches the end of its operational life and private stations emerge, operators will need new contractual, financial and insurance frameworks.
The challenge is partly one of scale. Bonwick said the space insurance market may have capacity of roughly $500 million to $600 million for a single spacecraft in an ideal case. That may be meaningful for a traditional satellite, but far less so for private infrastructure projects that could ultimately cost many billions.
“You can see the problem there just for getting the space station up there,” he said.
Bonwick suggested that future projects may increasingly require support from broader financial markets rather than relying solely on traditional insurance capacity, drawing comparisons with large terrestrial infrastructure projects where insurance forms only one layer of risk transfer.
Space debris has become one of the most visible concerns around orbital activity, although Bonwick said its direct insurance impact remains difficult to quantify because causation is often unclear.
The issue is not whether debris exists, but whether insurers can reliably identify its role in actual losses. A satellite may lose power, but determining whether that was caused by debris, radiation, component failure or another issue can be difficult when the asset cannot be physically inspected.
“At the moment there’s a massive information gap,” Bonwick said.
What is clearer is the operational cost of congestion. Collision avoidance manoeuvres consume fuel, shorten satellite lifespans and interrupt service, making debris less an abstract hazard than a growing operational burden.
“There’s definitely a cost to debris,” he said. “There’s cost to collision avoidance.”
For Bonwick, orbital congestion remains more of a looming systemic threat than a fully realised one. Major collisions are still rare, but the consequences of a serious event in heavily used orbital bands could be significant.
The challenge for insurers is that the market is still adapting from a world of limited insured launches into one of crowded low Earth orbit, large constellations and increasingly interconnected commercial dependencies. Bonwick believes underwriting will gradually need to move beyond purely asset-by-asset analysis towards broader portfolio and business-based approaches.
“Something’s got to change,” he said.
The longer-term question may not simply be how insurers price individual satellites, but whether the market can support an industry increasingly built around infrastructure, services and commercial interdependence in orbit.
