How do satellite constellations impact space risk? Swiss Re examines the issue

This story is reprinted with permission from FC&S Legal, the industry’s only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.

Over the next 10 years, the number of active satellites in orbit is set to multiply. New satellite constellations that deliver global services such as Earth observation, internet connectivity and voice communications are spurring this development.

Risk of collisions

Lower orbits in particular are becoming increasingly populated and littered with debris, putting satellite operations at risk of collision. In fact, orbital debris makes up over 90% of the tracked objects orbiting the Earth today.

A new study from Swiss Re explores the implications for collision risk in low Earth orbits (LEO). It highlights legal challenges such as how liability may be attributed in case of collision and examines how the insurance industry is responding to the needs of increasingly complex satellite operations.

The catalogued orbital population has grown by 19% since 2011 to around 19,000 objects, with the greatest increases among operational payloads and fragmentation debris.

New challenge for insurance industry

Jan Schmidt, head of space at Swiss Re, said, “With more and more constellations being deployed in LEO, the insurance industry is facing new challenges. Typically, insurers have provided insurance products that respond to total loss or damage to large, high-value communications satellites in geostationary orbit. Today we are seeing increased demand for products offering similar financial protection but for constellations made up of hundreds or even thousands of satellites operating in LEO.”

In a statement, Swiss Re explained that, due to rapid advances in technology and developments in manufacturing capability, many new private sector players are now leading space operations in LEO. Satellite constellations, especially in LEO, could cause the greatest disruption to space traffic and how space is used.

Constellations — with up to hundreds or thousands of satellites working together — provide a so-called overall mission effect. As opposed to single satellites, constellations aim to offer complete spatial coverage across the Earth at a high revisiting rate.

Underwriting this highly specialized class of business

Swiss Re said that, in a LEO constellation with multiple satellites orbiting the Earth multiple times a day, collision risk is a significant consideration for insurers. Given the heightened probability of debris impact in LEO, insureds, especially in the most exposed regions at around 800 km altitude, should give consideration to damage to their satellites from debris impact.

The Swiss Re report shares insights into the current ambiguity in satellite anomaly and failure attribution, debris population characterization and lethality from debris impacts.

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Swiss Re pointed out that, to date, issues of collision avoidance, situational awareness and deorbiting of decommissioned satellites have been in the background of insurers’ overall risk assessment for both geostationary orbit (GEO) and LEO insurance programs. In the future, the probability and consequence of collision are likely to become primary considerations when underwriting this highly specialized class of business.

The report, a sequel to its first publication on space debris in 2011, was co-authored by Philip Chrystal, senior claims expert at Swiss Re; Dr. Darren McKnight, technical director at Integrity Applications Inc. in the United States; and Pamela L. Meredith, chair of the space law practice group at Zuckert Scoutt & Rasenberger LLP in Washington, D.C.

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Victoria Prussen Spears, Esq., (vspears@alm.com) is associate director of FC&S Legal, editor of the Insurance Coverage Law Report, and senior vice president at Meyerowitz Communications Inc.