UK space insurance industry grows by a quarter despite pandemic contraction
The UK’s space insurance industry grew by quarter in the year the pandemic hit, drawing in some £20m into the more than £16bn sector, according to fresh analysis.
Linklaters associate Nicholas Puschman told City PM that the growth was “not surprising given that London has a well-established history in underwriting space risks and responding to the risks presented by new types of activities, such as satellite constellations.”
“Having adequate insurance coverage is a critical step in getting a space project off the ground. Investors and lenders will want to know that the risk and potential liability arising from space assets are well covered through insurance.”
Despite contracting slightly over the course of the pandemic, the industry’s manufacturing and ancillary services, such as brokerage, IT and consultancy offerings, increased – recording some £23m and £20m in earnings respectively.
Amid escalating competition, the UK’s space applications segment, including satellite broadcasting and communication, shrank by around two per cent, the equivalent of £280m between 2019 and 2020, analysis by BryceTech, commissioned by the government, found.
However, satellite communications still contributed over £10bn to the industry’s total £16.8bn earnings for 2020. And this year, the sector is anticipated to haul in a little over £17bn to the UK economy.
The rising popularity and viability of space tourism in the US has ushered in a wave of growth in the UK’s own industry, which grew by more than a third in the 12-month period – prior to the recent successes of Blue Origin and Virgin Galactic.
In the decade to 2021, 145 individual investors from across nearly 40 businesses have invested almost £6bn into the country’s growing space sector – making the UK the second largest attractor of private investment in emerging space firms.
The country’s space industry accounted for 0.31 per cent of UK GDP between 2019 and 2020. And the percentage is expected to grow exponentially over the next decade, as the country readies for its first-ever launches from UK soil later this year.
In establishing a launch capability, businesses are expected to enjoy boosts to their revenue, a trend that had already been reported by 16 per cent of organisations surveyed for the government’s analysis.