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

Bylined Reporters Leng Cuihua and Yang Xiaohan

At the start of this year, the commercial space sector has seen a surge in financing activity. In February, multiple companies—including Xingji Rongyao, Jianyuan Technology, and Xinghuo Space—completed financing rounds in succession. The dense deployment of capital is accelerating efforts to build liquid launch vehicle technology, reusable technologies, and full-industrial-chain capabilities.

Driven by both policy and market “twin engines,” commercial space is quickly moving beyond the single-track model led by “state-owned teams,” entering a diversified development pattern in which market-oriented players actively jump in. However, as the industry footprint expands rapidly, the risk exposure in launch and operations has also grown. Faced with high trial-and-error costs, commercial space’s rigid demand for risk hedging is rising quickly.

Against this backdrop, commercial space insurance has been assigned a greater mission. Multiple interviewees said that China’s commercial space insurance is currently still at an early stage; the real pain points of “low coverage share and high premium rates” urgently need to be addressed. The way to break the deadlock lies in abandoning the traditional “pay after the fact” mindset and transitioning to full-cycle management of “joint risk governance + shared data building + industry enablement.” This is not only a self-innovation for the insurance industry, but also the inevitable path to support the high-quality development of commercial space.

A Market for Risk Hedging Worth Trillions: Urgent Need

In recent years, China’s commercial space industry has maintained rapid growth. The top-level policy support framework has been continuously refined, injecting strong momentum into the sector and also opening up broad market space for commercial space insurance.

On the macro level, 《The CPC Central Committee’s Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development》 includes aerospace and aviation in the list of strategic emerging industrial clusters. In November 2025, the China National Space Administration specifically established a Commercial Space Department, and in 《The Action Plan of the China National Space Administration for Advancing High-Quality and Safe Development of Commercial Space (2025–2027)》 it also mentioned establishing a mandatory insurance system for commercial space activities.

When it comes to industrial layout, China’s commercial space development space continues to expand. From December 25 to December 31, 2025, China submitted to the ITU (International Telecommunication Union) applications for frequency and orbital resources for an additional 203k satellites.

Policy dividends combined with market expansion are driving commercial space toward explosive growth. Data from the Research Institute of China Business Industry indicates that from 2020 to 2024, the value of China’s commercial space industry rose from 1 trillion yuan to about 2.3 trillion yuan. Meanwhile, in 2025, China carried out 92 space launches in total, of which 50 were commercial launches—marking the first time the share exceeded 50%.

Rapid expansion of industry scale also means that launch risks and complexity rise in parallel. The demand for risk hedging is becoming increasingly urgent, and the “stabilizer” role of commercial space insurance is becoming ever more prominent.

A relevant executive from China Property & Casualty Insurance Co., Ltd. (hereinafter referred to as “PICC P&C”) told reporters from the Securities Daily that insurance is an important production factor across the commercial space industry chain. Through a professional loss-compensation function, it provides stable support for enterprises’ continuing reproduction. Insurance can provide a packaged solution covering property, personnel, liability, freight, and other areas across the entire industry chain.

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 reporters from the Securities Daily that insurance is not only a backstop tool for risk, but can also drive supply-chain upgrades. For example, requiring satellite manufacturers to take out quality liability insurance would push them to improve product reliability. At the same time, risk data accumulated by insurers can feed back into technology iterations, ultimately forming a “insurance—data—improvement” closed loop.

Yang Fan, general manager of Beijing Paipaiwang Insurance Brokerage Co., Ltd., added that insurance can also effectively enhance enterprises’ financing credit. In the financing field, satellite assets are often characterized by high value, high risk, and difficult supervision, making it hard for traditional financial institutions to directly treat them as collateral. A more complete insurance方案 can cover risks throughout the full lifecycle—from satellite launch to on-orbit operations—turning satellite assets into qualified collateral that banks can accept. This “insurance + financing” model has been widely used in the industry, helping multiple companies complete large-scale constellation networking through bank loans.

Pooling and reinsurance cooperation to spread risk

Given the characteristics of commercial space underwriting targets—high value and high risk—the insurance industry mainly adopts “grouping” models such as co-insurance and reinsurance, pooling efforts to spread risk.

Co-insurance is the first transfer of risk: multiple insurance companies jointly provide coverage for the same underwriting target, jointly sharing the risk. Reinsurance is the second transfer of risk: it refers to the insurer partially transferring 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 regulatory authorities in Beijing, 17 property and casualty insurance institutions, 2 reinsurance institutions, and 1 insurance intermediary institution in Beijing jointly established the country’s first commercial space insurance co-insurance pool—the “Beijing Commercial Space Insurance Co-insurance Pool”—meaning that China’s commercial space insurance risk-sharing system has entered a new professional stage of development.

A relevant executive from the Beijing Regulatory Bureau of the National Financial Regulatory Administration said that, in terms of organizational structure, the aforementioned co-insurance pool adopts a two-tier system of “direct insurance + reinsurance” to ensure that overall underwriting capacity is stable, sound, and reliable. Based on setting entry thresholds, it dynamically adjusts the member structure to flexibly match the risk characteristics of different aerospace projects and the corresponding insurance resources. In terms of the service system, through a linked model of “P&C + intermediaries,” it provides aerospace enterprises with a one-stop insurance solution.

Data shows that since its establishment in March 2025 through the end of that year, the Beijing Commercial Space Insurance Co-insurance Pool had provided risk protection of nearly 7.7 billion yuan for 17 space launch projects.

“The low share and high premium rates” dilemma awaiting resolution

Although the market prospects are broad, commercial space insurance still faces many constraints in real-world implementation.

According to Yang Yaopeng, general manager of the Important Clients Department of China United Property & Casualty Insurance Co., Ltd., the commercial space insurance currently operated by the company mainly has two categories: first, satellite insurance, covering launch and initial operations insurance, as well as on-orbit life insurance; second, rocket insurance, including pre-launch insurance, launch insurance, and third-party liability insurance for satellite and rocket launches, providing comprehensive coverage for risks across the entire process—from pre-launch commissioning to on-orbit operations.

The above-mentioned relevant executive from PICC P&C said that during China’s development of commercial space, various risks will gradually become visible, with challenges and opportunities intertwined. On one hand, low-orbit satellite constellation networking is accelerating, with frequent first flights of high-carrying-capacity reusable rockets bringing launch activities into a high-density, normalized stage; technology iteration compresses verification cycles; and unknown risks arising from multiple innovative technologies continue to expand. On the other hand, supply-chain diversification increases the difficulty of quality control, while new risks keep emerging, such as collisions involving space debris and safety risks at landing zones. These risks show the characteristics that the more aggressive the technological innovation is and the more complex the risk chain becomes, posing significant challenges to the co-insurance pool’s underwriting capacity and risk prevention and control.

A relevant executive from Sunlight Property & Casualty Insurance Co., Ltd. (hereinafter referred to as “Sunshine P&C”) told reporters from the Securities Daily that it is difficult to perform actuarial pricing for commercial space insurance. In addition to the core explicit risk of launch failure, insurers also need to fully consider implicit risks such as on-orbit operational failures, collisions with space debris, cyberattacks, and information security. The uncertainty of risks across categories increases the difficulty of product pricing, and also sets higher requirements for insurers’ risk assessment capabilities.

With multiple factors stacking up, China’s commercial space insurance market, to a certain extent, has encountered the awkward situation of “low share and high premium rates”: the insured amount provided is far below the actual construction costs of rockets and satellites, while enterprises’ insurance costs remain high.

The above-mentioned relevant executive from Sunshine P&C analyzed that behind the “low share and high premium rates” phenomenon there are multiple reasons. First, risks are highly concentrated; domestic insurers’ capacity to retain risk is limited. To prevent the pressure of large claims, insurers can only adopt defensive strategies of lowering insured amounts and raising premium rates. Second, the industry still lacks unified risk assessment standards and information disclosure mechanisms; insurers therefore cannot accurately “profile” risks and can only price conservatively. This objectively reflects that the market is still at an early stage.

From “paying after the fact” to “joint risk governance”

Faced with the many limitations of an early-stage market, commercial space insurance urgently needs to integrate deeply with the industrial chain—shifting from a single “pay after the fact” approach to “full-cycle risk management.”

Yang Fan emphasized that the value of insurance should not only be to act as the “payer” after an accident occurs, but should be reflected in risk early-warning 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 research and development, and insurance to promote improvement” mechanism can reduce the probability of risk from the source.

A relevant executive from PICC P&C also told reporters that there is a prominent cognitive bias in the current commercial space insurance field: over-equating insurance with a “risk transfer” tool, focusing only on premiums and insured amounts while ignoring the strong correlation between insurance premium rates and indicators such as rocket reliability and the number of launch attempts. It also overlooks that insurance is a full-cycle and long-term risk management tool. To break the deadlock, it is necessary to clarify insurance’s positioning as a long-term risk management tool and build a coordinated model of “joint risk governance + shared data building + industry enablement.” Through deep integration, it helps enterprises improve risk control, accumulate data, and iterate technology, ultimately achieving a win-win result.

Looking ahead, a relevant executive from Sunshine P&C said that as the industry matures, risk data is accumulated, and industry standards are improved, insurance pricing will inevitably move toward greater refinement and differentiation. At the same time, as domestic companies take on more international launch orders, China’s commercial space insurance services will also accelerate “going global,” deepening participation in the global reinsurance system. While aligning with international standards, China will continue to enhance its international discourse power.

(Editor: Qian Xiaorui)

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