Insurance companies safeguard commercial spaceflight heading towards the stars and the sea

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Our reporter Leng Cuihua and Yang Xiaohan

At the start of this year, a wave of funding enthusiasm has been building in the commercial spaceflight sector. In February, multiple companies—including Xingshi Glory, Arrow Yuan Technology, and Starfire Space—completed financings one after another. With capital deploying densely and rapidly, it is accelerating the pace of building liquid launch vehicles, reusable technologies, and an integrated full industrial chain.

Driven by both policy and market in tandem, commercial spaceflight is rapidly moving beyond the “state-led” single-track model, entering a more diversified development pattern in which market-oriented entities enthusiastically jump in. However, as the industry’s map expands quickly, the risk exposure in launch and operations has also grown. Faced with high trial-and-error costs, the rigid demand for risk hedging in commercial spaceflight is rising fast.

Against this backdrop, commercial spaceflight insurance has been given a greater mission. Multiple interviewees said that China’s commercial spaceflight insurance is still in an early stage; the practical pain points of “low coverage ratios, high premium rates” urgently need to be addressed. The way to break the deadlock lies in moving away from traditional “pay after the fact” thinking and transitioning to full-cycle management of “risk co-governance + data co-construction + industry enablement.” This is not only an innovation within the insurance industry, but also the only path to ensure high-quality development of commercial spaceflight.

A rigid demand for risk hedging in a trillion-yuan-level market

In recent years, China’s commercial spaceflight industry has maintained rapid growth. The continuous improvement of the top-level policy support system has injected strong momentum into the sector, and also opened up broad market space for commercial spaceflight insurance.

At the macro level, the “Suggestions of the CPC Central Committee on Formulating the 15th Five-Year Plan for National Economic and Social Development” listed aerospace and aviation as part of strategic emerging industrial clusters. In November 2025, the National Space Administration specifically established a Commercial Spaceflight Department, and in the “National Space Administration’s Action Plan to Promote High-Quality and Safe Development of Commercial Spaceflight (2025–2027),” it mentioned establishing a compulsory insurance system for commercial spaceflight activities.

In terms of industrial layout, China’s development space for commercial spaceflight continues to expand. From December 25 to December 31, 2025, China submitted to the ITU (International Telecommunication Union) applications for frequency and orbital resource allocation for an additional 203k satellites.

The combined tailwinds of policy benefits and market expansion are driving commercial spaceflight into explosive growth. Data from the China Business Industry Research Institute shows that from 2020 to 2024, China’s commercial spaceflight industry output value increased from 1 trillion yuan to about 2.3 trillion yuan. Meanwhile, in 2025, China carried out 92 space launches in total, of which commercial launches were 50—marking the first time the proportion exceeded 50%.

The rapid expansion of industry scale also means that launch risk and complexity are rising in step. As the need for risk hedging becomes increasingly urgent, the “stabilizer” role of commercial spaceflight insurance has become even more prominent.

A related person in charge of The People’s Insurance Company (Property) of China (hereinafter referred to as “PICC P&C”) told Securities Daily reporters that insurance is an important production factor in the commercial spaceflight industrial chain; through its professional loss-compensation function, it provides stable support for enterprises to sustain their re-production. Insurance can provide a package of solutions for the entire industrial chain, including property, personnel, liability, freight, and more.

Not only that, insurance also plays a multiplier effect in supply-chain coordination and the financing side. Jiang Han, a senior researcher at PanGu Think Tank (Beijing) Information Consulting Co., Ltd., told Securities Daily reporters that insurance is not only a backstop tool for risks, but can also help drive supply-chain upgrades. For example, requiring satellite manufacturers to purchase product quality liability insurance will force them to improve product reliability. At the same time, the risk data accumulated by insurers can also feed back into technology iteration, ultimately forming a closed-loop of “insurance—data—improvement.”

Yang Fan, general manager of Beijing Paipaiwang Insurance Brokerage Co., Ltd., added that insurance can effectively enhance enterprises’ financing credit as well. In the financing arena, satellite assets are often characterized by high value, high risk, and difficult-to-regulate features, making it hard for traditional financial institutions to use them directly as collateral. A well-designed insurance solution can cover the full lifecycle risks of satellite launch and in-orbit operations, converting satellite assets into qualified collateral acceptable to banks. This “insurance + financing” model has been widely used in the industry, helping multiple companies complete large-scale constellation networking through bank loans.

Risk-sharing through co-insurance and reinsurance to disperse risk

Given the high-value, high-risk characteristics of underwriting targets in commercial spaceflight, the insurance industry mainly uses “grouping” models such as co-insurance and reinsurance, pooling strength to spread risk.

Co-insurance is the first transfer of risk: multiple insurance companies jointly provide insurance coverage for the same underwriting target, sharing the risk together. Reinsurance is the second transfer of risk: it refers to an insurer transferring part of the insurance business it has undertaken to other insurers in the form of reinsurance, further dispersing its own risk.

From a practical perspective, in March 2025, under the guidance of relevant regulators in Beijing, with 17 P&C insurance institutions in the Beijing area, 2 reinsurance institutions, and 1 insurance intermediary institution, they jointly established the first commercial spaceflight insurance co-insurance consortium nationwide—“Beijing Commercial Spaceflight Insurance Co-insurance Consortium.” This indicates that China’s commercial spaceflight insurance risk-sharing system has entered a new phase of professionalized development.

According to a relevant person in charge of the Beijing Regulatory Bureau of the National Financial Regulatory Administration, the above co-insurance consortium adopts a two-tier structure of “direct insurance + reinsurance” in its organizational setup to ensure that overall underwriting capacity is steady and reliable. On the basis of setting entry thresholds, it dynamically adjusts member composition to flexibly match the risk characteristics and insurance resources of different spaceflight projects. In terms of service systems, through a “P&C insurance + intermediary” linkage model, it provides one-stop insurance solutions for aerospace enterprises.

Data shows that since its establishment in March 2025 until the end of that year, the Beijing Commercial Spaceflight Insurance Co-insurance Consortium provided risk coverage of nearly 7.7 billion yuan for 17 space launch projects.

A “low coverage ratio, high premium rate” dilemma awaiting resolution

Although the market prospects are broad, commercial spaceflight insurance still faces many constraints in actual implementation.

Zhaoneng Yao Peng, general manager of the company’s Important Customer Department at Sinograce United Insurance Co., Ltd., said that currently the commercial spaceflight insurance mainly operated by his company has two major categories: first, satellite insurance, covering launch and initial operations insurance, as well as in-orbit life insurance; second, rocket insurance, including pre-launch insurance, launch insurance, and third-party liability insurance for satellite rocket launches, providing comprehensive coverage of risks across the entire process from pre-launch testing and commissioning to in-orbit operations.

A related person in charge of PICC P&C said that in the process of China’s commercial spaceflight development, various types of risks will gradually emerge, with challenges and opportunities intertwined. On the one hand, the acceleration of low-orbit satellite constellation networking, the dense first flights of large-lift reusable rockets, and the entry of space launches into a high-density normalized stage are compressing technology iteration verification cycles; unknown risks brought by multiple innovative technologies are continuously increasing. On the other hand, supply-chain diversification is increasing the difficulty of quality control; new risks keep emerging, such as collisions with space debris and safety risks in landing zones. These risks show a “the more aggressive the technological innovation, the more complex the risk chain” characteristic, posing significant challenges to the underwriting capacity and risk prevention and control of co-insurance consortia.

A related person in charge of Sunlight Property Insurance Co., Ltd. (hereinafter referred to as “Sunshine P&C”) told Securities Daily reporters that actuarial pricing for commercial spaceflight insurance is relatively difficult. Besides the core explicit risk of launch failure, insurers also need to fully consider implicit risks such as in-orbit operational failures, collisions with space debris, cyberattacks, and information security. The uncertainty of various risks increases the difficulty of pricing products and also puts higher demands on insurers’ risk assessment capabilities.

With multiple factors compounding, to a certain extent China’s commercial spaceflight insurance market has encountered an awkward situation of “low coverage ratio, high premium rate”: the insured amount provided is far below the actual build cost of rockets and satellites, while enterprises’ insurance purchasing costs remain high.

The related person in charge of Sunshine P&C analyzed that behind the phenomenon of “low coverage ratio, high premium rate” there are many reasons. First, risks are highly concentrated. Currently, domestic insurers’ retention capacity is limited; to prevent the pressure of large claims, they can only adopt defensive strategies of reducing insured amounts and raising premium rates. Second, the industry still lacks unified risk assessment standards and an information disclosure mechanism, making it difficult for insurers to accurately “profile” the risks, so they can only price conservatively. Objectively, this reflects that the market is still at an early stage.

From “paying after the fact” to “risk co-governance”

Given the limitations of the early market, commercial spaceflight insurance urgently needs to integrate deeply with the industrial chain, moving from a single “pay after the fact” model to upgrading into “full-cycle risk management.”

Yang Fan emphasized that the value of insurance should not only be limited to being the party who “pays the bill” after an accident occurs; it should be embodied in risk early warnings at the front end. By establishing underwriting and risk-control standards independent of research and development testing, insurers can identify hidden hazards in the manufacturing process. This “use insurance to promote R&D, and use insurance to promote improvements” mechanism can reduce the probability of risk from the source.

A related person in charge of PICC P&C also told reporters that in the commercial spaceflight insurance field there is currently a prominent cognitive bias: over-equating insurance with a “risk transfer” tool. It focuses one-sidedly on premium and insured amount, while ignoring the strong correlation between premium rates and indicators such as rocket reliability and number of launches; it also overlooks that insurance is a full-cycle and long-term risk management tool. To break the impasse, it is necessary to clarify insurance’s positioning as a long-term risk management tool and build a collaborative model of “risk co-governance + data co-construction + industry enablement.” Through deep integration, it helps enterprises improve risk control, accumulate data, and iterate technology, ultimately achieving a win-win outcome.

Looking ahead, a related person in charge of Sunshine P&C said that as the industry matures, risk data is accumulated, and industry standards are improved, insurance pricing will inevitably move toward more refined and differentiated approaches. At the same time, as domestic enterprises take on more international launch orders, China’s commercial spaceflight insurance services will also accelerate “going global,” deeply participating in global reinsurance systems. While aligning with international standards, it will continue to enhance its international voice and influence.

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Editor-in-charge: Gao Jia