Technical risk is still a key focus for underwriters, especially for new Launch Vehicles, emerging spacecraft technology and innovative products such as 'satellite as a service' and Orbital Transfer Vehicles. Satellite manufacturers and operators are clearly keen to engage with and adopt these exciting growth areas. Insurers, on the other hand, are doubling down on their technical assessments prior to committing to joining clients on this journey due to a perceived increase in risk for early adopters.

Education and information sharing are therefore critical across these new innovative technologies; a process and discipline in which Gallagher’s Space team has been able to make significant strides to bring insurers forward. Underwriters are now better able to understand these evolving technical risk profiles, how we and our clients are translating this into an insurance framework and collaborating with us to finalise an effective and as a result have gained the confidence to collaborate with us to finalise effective and comprehensive insurance solutions.

Although not a new frustration within the space sector, design and manufacturing delays continue to present a significant stress point for both satellite buyers and the insurance industry alike. With several high-profile satellite programmes continuing to suffer delays (some now stretching over 2 years), the potential revenue missed and cost associated with delays is clearly a growing issue for those with significant capital invested in these projects. On a more positive note, the next-generation launch vehicle programs are starting to make significant progress, with the Ariane 6 seeing its second successful flight on 6 March 2025 and H3 achieving its fourth consecutive success on 2 February 2025. Further encouragement has come with the UK CAA granting the first-ever vertical launch license to RFA in January 2025.

The number of traditional GEO satellites on order sits at a historically low level, exacerbated by some buyers holding off on new projects. New small-GEO satellite options, multi-orbit solutions and the current manufacturing delays mean that finalising business plans and making large strategic decisions is more complex than ever for satellite operators.

What is apparent is that strategic partnerships between operators are now more important than ever. Over the last few years, we have seen a number of significant mergers and acquisitions announced (for example, SES/Intelsat, Bayanat/Yahsat and Viasat/Inmarsat), which aim to achieve size and scale and improve their ability to compete in the current marketplace. Other large-scale projects have brought novel operator collaboration models, such as IRIS², where SES, Eutelsat and Hispasat are working together to develop critical infrastructure for the European Commission. We feel that these trends will continue in response to the intensifying competitive landscape of the future.

As the ‘small sat‘ market continues to expand and develop, we are seeing a significant increase in those companies that want to engage with insurers. However, at this stage, there is a disconnect between the structure and practice of the insurance market and the needs of these new entrepreneurial ventures. For such projects, most insurers are still only willing to commit capacity on the launch phase, with a small subset looking to expand this to post-separation coverage where there is demonstrable prior success in orbit. Gallagher continues to work with insurers to expand the horizons of cover where possible, notwithstanding some enduring reluctance amongst insurers in the wake of the recent period of relatively poor underwriting results.