Captive Insurance for Space Tourism
With Elon Musk’s latest flashy stunt of launching a Tesla into space, it feels appropriate to provide some background on the more mundane areas of space exploration – captive insurance. There is space insurance. Shockingly enough, there is a large market for varying types of commercial space insurance. The largest sector of which is the satellite launch area. Low Earth orbit has been commoditized through decades of successful flights. Consequently, captive insurers are capable of properly pricing out the risks and requesting premium sufficient to finance their exposure.
Humans in Space
However, the same cannot be said for human space tourism. The next generation of space exploration will involve humans traveling to the stars. This fantasy is increasingly realistic as billionaires continue to visit outer space. Currently, the price point for visiting outer space is slightly out of most people’s budget ($20 million or more to go up with the Russians). The good news is that the price per launch continues to plummet at an increasing rate. It is very conceivable that people in their 40s today may spend a luxurious retirement vacation in orbit.
Low Earth orbit only scratches the surface. China is talking about returning to the moon and India has been developing a quality space exploration program for years. The best news being that Russia and the US are no longer the only players in the game. There are billions of dollars being poured into space exploration across the globe. This is changing the game for recreational human space flight.
Funding Space Tourism
So go the explorers, so, too, shall the markets follow. The commercialization of space is a revolutionary event occurring before our eyes. Much like the internet, it is impossible to understand a momentous movement as it occurs. How fortunate we are to live in these interesting times.
As the space industry’s cost goes down, so shall the middle class begin to explore space. There are already a handful of captive insurance policies available to cover commercial human space flight. They are typically custom policies from boutique carriers. These policies will formalize throughout the years. Currently, the key considerations in these policies revolve around a handful of international treaties governing outer space travel in general.
Read the Full Article on Captive International
Venture Captive Management’s latest piece, published in Captive International explores a number of issues that the captive insurance industry will need to face as space exploration becomes more common place in our modern society. VCM is proud to have Chief Compliance Officer and General Counsel, Matthew Queen’s, article Captives Meet the Final Frontier published on Captive International’s website. Captive International is a leading source for the latest news, analysis, and features drawn from ongoing coverage of the global captive insurance market and bespoke special reports. If you would like more information about how VCM can help your business, please contact us directly. We’ll be happy to help you find and create the captive insurance structure that work best for your company