Space Insurance Explained: How a $650 Million Market Prices Risk in Orbit
One bad year in 2023 wiped out several good ones and pushed the five year margin negative for the first time since 2001. What that means for anyone renewing cover in 2026.
Space insurance is one of the smallest specialty lines in the world and one of the most consequential. It sets the floor under launch contracts, it decides whether a satellite programme is financeable, and it is priced by a few dozen underwriters who all know each other.
It is also, on the numbers, a business that has struggled to make money.
The size of the pool
Aon’s Space Insurance Market Report is the standard reference, and its Q1 2026 edition gives the shape of the market. All figures are in US dollars and claims are measured by year of occurrence, so they get revised as settlements complete.
| Year | Premium income | Claims | Gross margin |
|---|---|---|---|
| 2023 | ~$550m | $1.43bn | -$882m |
| 2024 | ~$550m | Low | +$383m |
| 2025 | >$650m | ~$503m | +$147m |
Two things stand out. The whole global launch and in-orbit premium pool is smaller than the annual revenue of a mid-sized regional insurer. And a single bad year can wipe out several good ones.
Note also the definitional trap. Market research reports circulating in 2026 quote a “space insurance market” of around $4.43 billion growing to $6.23 billion by 2030. Those figures use a much broader definition of the sector and are not comparable to the Aon numbers. For launch and in-orbit premium specifically, the $550 to $650 million range is the one to cite. Do not blend the two.
What 2023 did
2023 is the pivot year that explains current pricing. Claims of $1.43 billion against premium of approximately $550 million produced a gross margin of minus $882 million. That single year took the rolling five year gross margin negative for the first time since 2001, to minus $643 million.
The response was capacity withdrawal. Roughly $160 million of launch and in-orbit capacity left the market during 2024.
Recovery since has been real but thin. Profitable 2024 and 2025 restored the rolling five year margin to plus $62 million at the start of 2026, which is barely above break-even across the cycle. That is the context for every renewal conversation an operator is having.
2025 in detail
Premium growth in 2025 came from several high value insured geostationary launches, launch vehicle flight-only covers and steady in-orbit renewals.
The claims side, at roughly $503 million against premium above $650 million, gave a loss ratio of 77.4 percent. That is a profitable year in a line with high volatility, but not a comfortable one.
The individual losses tell you what the market actually pays for: two small Chinese launch failures, approximately $30 million each for Astranis UtilitySat, which suffered a propulsion failure in transfer orbit after a December 2024 launch, and MethaneSAT, which suffered a power failure, and the potential total loss of SPAINSAT NG-II after it was struck by a space particle en route to its final orbital position following an October 2025 launch.
That last one is worth pausing on. A single high value geostationary spacecraft lost to an in-orbit event absorbed the year’s premium growth. In a pool this size, the loss distribution is dominated by a handful of large risks.
Who writes it
Twenty five insurers were underwriting space risks in 2026, the same number as 2025 but with real churn beneath the headline.
Phemis Underwriters, formed from the former Hiscox space team, began writing in mid-2025 with $25 million of capacity. Aesir Space, from the former Volante team, resumed in 2025 with $8.5 million. Hive Underwriting was new for 2026 with $25.5 million. Occam paused in November 2025 and resumed in February 2026 with replacement capacity from Nexus Underwriting and a reduced $18 million line.
Theoretical capacity for 2026 was $709.4 million for launch and $669.4 million for in-orbit, excluding Chinese markets. The geographic concentration is striking: the UK accounts for roughly 42.7 percent of launch capacity at $303 million, with Asia at $160.7 million, then France, the United States and the rest of Europe.
What actually gets covered
Pre-launch
Damage during manufacture, testing and transport to the launch site. Usually a property policy rather than a space policy, though the transition point to launch cover needs care.
Launch
Typically attaching at intentional ignition and running through to a defined point after separation, often including initial in-orbit testing. This is where the concentration of risk sits and where rates are hardest.
In-orbit
Annual cover for the operational life, renewable. Responds to total loss, constructive total loss and partial loss, with partial loss usually measured against a defined capacity or transponder metric.
Third party liability
Cover for damage to people or property outside the launch participants. For a US licensee this is sized to the FAA’s maximum probable loss determination, capped at $500 million by statute. We set out how that interacts with the contract in our piece on cross waivers and indemnification.
Why the cross waiver matters to the underwriter
The cross waiver in the launch services agreement is not just a contractual nicety. It determines what the insurer is actually on risk for.
Because each participant bears its own property loss regardless of fault, an in-orbit policy on the satellite responds to the satellite’s loss and has no subrogation route against the launch provider. The premium reflects that. If a contract were negotiated without an effective flow down, the risk profile changes and the underwriter needs to know.
This is the most common practical failure we see described. The contract team and the broker work from different assumptions, and the mismatch only becomes visible after a loss.
What operators should expect at renewal
Aon’s own guidance for 2026 is that hard market conditions persist through the early part of the year, with possible easing later if profitability holds. Placements with large sums insured remain difficult and underwriters are described as extremely selective.
Practically, three things follow. Large single risks will need to be spread across more markets than they were five years ago, which means more brokers, more disclosure and more time. Loss history and heritage matter more than they did in a soft market, so a new bus design without flight heritage will pay for it. And the flight-only structures that grew in 2025 exist because they let underwriters take a defined slice rather than the whole exposure, so they are worth discussing early rather than treating as a fallback.
Questions people actually ask
How big is the space insurance market?
Global launch and in-orbit premium income was over $650 million in 2025, against claims of approximately $503 million. Theoretical capacity for 2026 was $709.4 million for launch and $669.4 million for in-orbit, excluding Chinese markets. Broader market sizing reports quoting several billion dollars use a different and much wider definition of the sector.
Why did space insurance get more expensive?
2023 produced $1.43 billion of claims against approximately $550 million of premium, a gross margin of minus $882 million, which turned the rolling five year margin negative for the first time since 2001. Around $160 million of capacity withdrew during 2024 and rates rose. Profitable 2024 and 2025 have only just brought the five year margin back above break-even.
Is launch insurance mandatory?
Third party liability insurance is mandatory for US licensed launch and reentry under 51 U.S.C. 50914, sized to the FAA’s maximum probable loss determination. Insurance on the satellite itself is not legally required and is a commercial decision, usually driven by financing conditions. Other jurisdictions impose their own requirements, such as the UK’s standard €60 million figure for typical orbital operations.
What is a constructive total loss for a satellite?
A loss where the satellite has not been destroyed but has lost enough capability that repair or continued operation is not commercially viable against the insured value, usually measured against a defined performance metric such as usable transponders or available power. The precise trigger is defined in the policy and is one of the most negotiated points in an in-orbit placement.
