The Space Race for Insurers

As Richard Branson and Jeff Bezos set off into space, without liability insurance, providers are planning ahead for future demand.

By Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni

Branson and Bezos launch a space race for insurers, too

Richard Branson is scheduled to fly into suborbital space this Sunday, nine days ahead of a similar journey by a fellow billionaire, Jeff Bezos. These first flights for the space moguls will also launch without liability insurance.

Brokers say that neither Virgin Galactic nor Branson appears to have purchased coverage should the British business mogul be hurt, or worse. (The craft is likely covered.) The same goes for Bezos and his company Blue Origin. Virgin, Branson and Blue Origin declined or did not respond to requests for comment.

Liability coverage is required on international flights. But Virgin’s craft, the V.S.S. Unity, launches and lands in the same place. As such, Branson’s flight, despite rocketing 2,400 miles an hour to the edge of space, is technically considered domestic travel. Virgin has said passengers will eventually be required to sign a contract agreeing to be fully liable for their own safety, but American law makes it nearly impossible to transfer all liability in the case of personal injury or loss of life.

Insurance providers say it’s very likely that regulators will soon require liability policies. There aren’t currently a lot of options for casual space travelers, but some insurers are interested in developing such policies. The German insurance giant Allianz first began designing space tourism policies in 2012, though there is no evidence one has been sold. (Allianz did not return a request for comment.) And while space tourism is new, insurance experts say there is now more than enough data on rocket launches to know how to price these policies.

Lloyd’s of London estimates that the space insurance market has averaged $500 million in annual premium payments over the past decade. But those policies have generally covered satellites and other nonhuman cargo.

Space tourism could create a much larger demand for coverage. “The big question for the insurance industry is whether this is more like aviation insurance or more like current space policies,” said Neil Stevens, a senior vice president of space products at the insurance broker Marsh. “There hasn’t been a situation where insurance markets haven’t stepped up.”

But for now, space travel is launching without an insurance net for passengers.

Developing those policies is one more small step that is likely needed before space travel can leap into a fully functioning tourism market.

HERE’S WHAT’S HAPPENING

Markets tumble amid investor fears about the economic recovery. The S&P 500 fell as much as 1.6 percent and the yield on 10-year Treasury bonds dropped after weekly unemployment claims came in higher than expected. Supporters of the Biden administration’s economic plan argued that was a reason to keep pandemic-era government support in place.

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