Amazon CEO’s 2021 Space Odyssey Is Too Great a Risk for Insurers; Virgin Galactic cleared for take-off

Placing one of the richest individuals on the planet into orbit has proven to be too much of a step for insurers, who are unwilling to assess the risk of losing Jeff Bezos or his fellow travelers in the world. space.

Lifetime space enthusiast Amazon CEO Bezos competes with Elon Musk and Richard Branson to become the first billionaire to fly beyond Earth’s atmosphere.

And while insurers are well known for providing coverage for even the most bizarre risks, at a price, potential accidents in space are not yet among them.

“Space tourism carries significant risks, but it is not yet a problem that life insurers pose specifically because it is so rare for anyone to travel in space,” said Michael Barry, spokesperson for the space industry. ‘Insurance Information Institute (III).

There is a market of nearly $ 500 million to insure satellites, rockets and unmanned spaceflight, but no legal obligation for an operator like Blue Origin, founded by Bezos, to insure passengers in the event of injury. or death or for space tourists to have life coverage, brokers and insurers have said.

“We are not aware of a case where anyone is insured against passenger liability,” Neil Stevens, senior vice president of aviation and space at Marsh, the world’s largest broker, told Reuters. insurance to the world.

Assuming they take off as planned next month, Bezos and the other aspiring astronauts on Blue Origin’s New Shepard spacecraft will not only spend several minutes 100 km above earth in a truck-sized capsule. , they will also have to come back.

The only group that has regularly flown humans in orbit since the 1960s is Branson’s Virgin Galactic. All have been tested, with one failure in 2014 resulting in death. Blue Origin performed 15 unmanned suborbital flights without failure, data from Seradata SpaceTrak showed on June 10.

Bezos, Blue Origin and Virgin Galactic did not respond to Reuters requests for comment on their insurance plans and flight records.

Different risk profiles

Not being insured in space is nothing new.

NASA and the United States, in general, do not buy liability coverage, with government launches primarily insured by taxpayers, said Richard Parker of Assure Space, a unit of insurer AmTrust Financial that provides insurance. spatial insurance.

NASA astronauts are eligible for government life insurance programs, a NASA spokesperson said in an email response.

Charles Wetton, head of space policies at insurer Global Aerospace, said astronauts on government-funded missions are carefully screened for their knowledge, skills and fitness and train for several years. before taking off.

“They and their families understand the risks of the work they do,” said Wetton.

But commercial space cadets can only get a few days of training for a suborbital flight or a few months for a trip to the International Space Station (ISS), Wetton said, adding, “This represents two risk profiles. very different that insurers will take into account “.

Blue Origin on its website says the spaceflight passenger will receive training the day before launch, including mission and vehicle overviews, safety briefings, a mission simulation and in-flight activity instruction.

Virgin Galactic said attendees will receive three days of training and preparation before launch.

Insurers expect waivers and foolproof contracts from commercial space travel companies, saying they will not bear any burden if a passenger dies during a flight.

NASA has requested responses from industry for its draft accountability framework for privately funded astronaut missions to the ISS. NASA’s plans include the requirement for private astronauts to purchase life insurance.

It’s still early days, but coverage for space tourists could be the next step, said Tim Rush, senior vice president, U.S. space, at insurance broker Gallagher, adding that the life insurance market provides. currently individual coverage of $ 2-5 million for individuals. astronauts.

The only mandatory insurance in place for commercial space operators is third party liability, primarily to cover property damage on land or to an aircraft in flight, said Akiko Hama, account manager, space and aerospace underwriting at Global Aerospace.

Blue Origin plans its six-seater spacecraft to take off on July 20 and fly for four minutes beyond the border between Earth’s atmosphere and space, where passengers will experience total weightlessness.

Million dollar question

A key question for the development of the sector is whether the risks associated with tourism fall under space or air insurance, insurers and brokers told Reuters.

The United Nations Outer Space Treaty and the 1972 Liability Convention govern all activities in outer space and very few countries have a legal framework for commercial human spaceflight, they said. .

The very first aviation insurance policy was taken out by Lloyd’s of London in 1911. A few years later, the market insured Charles Lindbergh and his single-engine aircraft for $ 18,000 on his non-stop flight from the United States to Europe. .

Space travel is different, Marsh’s Stevens said, as passengers return to the same place they left, which technically makes it a domestic trip to which international aviation insurance cannot be applied, which means that there will also be no limitation of liability.

“The market for aviation, aviation insurance, etc., is less inclined to take risks involving spacecraft,” he said, adding that the question of whether space tourism travel falls under aviation or space insurance is a “million dollar question”.

While air travel is governed by rules that establish the liability of airlines for the deaths of passengers, Stevens said he was not aware of any plans for similar rules for space tourism.

However, Wetton said Global Aerospace has started receiving requests from companies for suborbital missions.

“In 10 years, maybe the two lines, aviation and spaceflight will look a lot alike,” said Parker of Assure Space.

“Some lawmakers will say, look, we now have average Joes flying on these launchers and we need to protect them,” Parker added.

Virgin Galactic cleared for take-off

Virgin Galactic says it has received approval from the US aviation safety regulator, the Federal Aviation Administration (FAA), to transport people into space, increasing pressure on rivals in the burgeoning and expensive space tourism industry. .

The company’s shares jumped 40% to $ 56.40, their highest since February, after more than doubling in value this year.

Branson, who would fly into space himself in an attempt to beat rival billionaire Bezos to the Last Frontier, was given the green light just one month after a successful test flight.

Last month, Virgin Galactic completed its first manned space flight from its new home port in New Mexico in May, as its six-passenger SpaceShipTwo hovered toward a safe runway landing with its two pilots.

The company said it has more than 600 reservations for 90-minute flights that include several minutes of weightlessness, priced at $ 250,000 a ticket.

“Today’s FAA approval … gives us confidence as we conduct our first full crew test flight this summer,” Virgin Galactic CEO Michael Colglazier said in a statement. .

News by Reuters, edited by Hospitality Ireland. Click on subscribe to register for Hospitality Ireland printed edition.

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