Even the smallest pieces of scrap in space can put satellites out of action.
Chipped paint particles, fallen screws or lost tools are transformed into destructive projectiles at speeds of tens of thousands of kilometers per hour.
The problem is that more and more such garbage is flying around in orbit.
The risks for satellite operators have increased - also because there are hardly any insurers who want to insure the missiles.
"It's a real problem for us insurers," says Richard Parker, co-founder of Assure Space, a subsidiary of the American insurer AmTrust Financial.
"Obtaining coverage is becoming increasingly difficult as insurers increasingly recognize that they are taking on significant risk." AmTrust Fiancial stepped out of the business of insuring satellites in low earth orbit up to 2,000 kilometers in altitude.
The few policies that AmTrust Financial has sold since then exclude collision damage.
German corporations such as Allianz are also active in the niche business.
But the increasing space junk alone is no reason to withdraw from the market, say the Munich-based company.
The number of satellites is growing and growing
More than 8,000 satellites now orbit the earth to send messages, maps, videos and scientific data to us humans. The number of active satellites has increased steadily over the past few years. Billionaire Elon Musk is launching more and more such missiles into space through his company SpaceX in order to create an entire satellite network for comprehensive Internet access around the world. SpaceX does not want to say whether the devices in orbit are insured. Large technology companies such as Google, Apple and Amazon as well as telecommunications service providers are also increasingly using satellites to transmit data.
According to the analysis company Seradata, more than 40 percent of the celestial bodies are no longer active because they are too old or broken. They are not tidied up or dismantled. Since the first space mission six decades ago, more and more garbage has been accumulating in space. Organizations such as the European Space Agency (ESA) estimate that around 8,000 tons of space junk are racing around in orbit, damaging the satellites and endangering astronauts. Not only the ESA is therefore working flat out on systems to get the garbage out of orbit.
Satellite insurance does involve high risks, but it is also a lucrative niche for insurance companies.
In 2020, according to Seradata, they took in premiums of $ 475 million and had to cover losses of $ 425 million.
The contributions are also 10 to 20 times higher than in aviation, says Peter Elson, head of the broker Gallagher Aerospace.
Taxpayer is asked to pay
In the past, policies protected satellites from loss, failure, or damage throughout their orbital life, but not from loss of revenue due to outages. There was also liability insurance in case one missile damages another or causes damage to the ground when it flies back into the atmosphere. Axa manager Denis Bousquet estimates that only about half of the newly launched satellites have such insurance. Insiders expect that more and more policies will rule out collision damage and that fewer and fewer satellites will be able to be insured at all.
However, experts also assume that new players will enter the market and end the supply shortage. Until then, companies, universities and governments, and thus taxpayers, could pay more. In June, for example, the Export-Import Bank of the United States (EXIM), which finances foreign trade in American products and assumes the credit risk, approved a loan of $ 80.7 million for a SpaceX launch and a launch and in -Orbit insurance for the Spanish communications network Hispasat.