Reach for the stars: insurers are playing a critical role in transforming the dream of affordable space tourism from a science fiction fantasy into a reachable reality.Key Points * The Commercial Space Launch Amendments Act limits the liability for companies involved with commercial space travel. * Some coverage for commercial space flight will be similar to airplane insurance, while other aspects will be closer to satellite coverage. * The current capacity for satellite launches is $300 million to $400 million per launch. Third-party liability capacity is roughly $1 billion per occurrence. * Insurance for manned space flight would be cheaper than for unmanned space flight. ********** Floating in zero gravity zero gravity n. The condition of apparent weightlessness occurring when the centrifugal force on a body exactly counterbalances the gravitational attraction on it. used to be something only government-trained rocket scientists could do. Flying to the edge of space, and beyond, was something only nations could afford. And space tourism? The stuff of science fiction. Until now. It seems that every week brings a new development in the race to commercialize space, and insurers seem to be involved behind the scenes in almost every case. At least four private companies are offering high-speed, high-altitude parabolic par·a·bol·ic also par·a·bol·i·cal adj. 1. Of or similar to a parable. 2. Of or having the form of a parabola or paraboloid. airplane flights to give civilians a taste of weightlessness weightlessness, the absence of any observable effects of gravitation. This condition is experienced by an observer when he and his immediate surroundings are allowed to move freely in the local gravitational field. . The so-called "Vomit Comet" technology was first used by NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. to train astronauts, but now even Average Joes, for just a few thousand dollars, can buy a ticket to float. In the fall of 2004, SpaceShipOne beat out a couple dozen other privately funded projects to become the first commercial craft to rocket into a suborbital suborbital /sub·or·bi·tal/ (sub-or´bi-t'l) infraorbital. sub·or·bit·al adj. Situated on or below the floor of the orbit of the eye. n. altitude of 100km twice in two weeks and win the $10 million Ansari X Prize The Ansari X PRIZE was a space competition in which the X PRIZE Foundation offered a US$10,000,000 prize for the first non-government organization to launch a reusable manned spacecraft into space twice within two weeks. . SpaceShipOne was funded by billionaire Paul Allen
Paul Gardner Allen (born January 21, 1953 in Seattle, Washington) is an American entrepreneur. With Bill Gates, he formed Microsoft. and designed by Burt Rutan Elbert Leander "Burt" Rutan (born June 17, 1943 in Estacada, Oregon) is an American aerospace engineer noted for his originality in designing light, strong, unusual-looking, energy-efficient aircraft. and his company, Scaled Composites Scaled Composites (often abbreviated as Scaled), formerly the Rutan Aircraft Factory, is located at the Mojave Spaceport, Mojave, California, United States and is headed by aircraft designer Burt Rutan. . "Manned space flight is not only for government to do," Rutan said in a statement. "We proved it can be done by a small company operating with limited resources and a few dozen dedicated employees. The next 25 years will be a wild ride, one that history will note was done for everyone's benefit." Rutan said that in 15 years, "space tourism will be a multibillion dollar business." Forget about commercial flight taking another 15 years to get off the ground. Richard Branson Sir Richard Charles Nicholas Branson (born 18 July 1950 in Shamley Green, Surrey, England), is a British entrepreneur, best known for his Virgin brand of over 360 , the force behind Virgin Atlantic, has negotiated a deal with the makers of SpaceShipOne to create five such vessels for his new venture, Virgin Galactic Virgin Galactic is a company within Sir Richard Branson's Virgin Group, which plans to offer sub-orbital spaceflights and later orbital spaceflights to the paying public. Mission , which promises to offer commercial space travel to the public by 2007. And in recent years, two private citizens paid about $20 million each to broker a ride on a Russian rocket and spend a week with the ultimate view of the world from the International Space Station. Both were able to buy insurance for their trips. Space travel is likely to become more common in the next several years, and more affordable, experts said. Insurers are backing the move to make the stars more accessible to regular people. While civilians are clamoring to sample this new world, insurers already are reaping the benefit of a whole new market. Sharing the Risk Just as the emergence of insurance and shared risk during the Renaissance allowed the first voyages of discovery and trade, so too insurance is supporting the modern exploration into space travel, said Edward L. Hudgins, director of the Washington, D.C.-based Objectivist Center and editor of "Space: The Free-Market Frontier." "Shared risk is crucial to any free-market venture" Hudgins said. "Insurance is one of the great capitalist creations in the modern world. It's basically a way to share the risk, and space fright is still a very risky venture" But because space flight is so rare, it's difficult to gauge the risk, he said. "It's a rocky road at first, but the insurance industry would be smart to get in on the ground floor," Hudgins said. Some insurers and brokers are already there. Jean Michel Jean Michel (died 1501) was a French dramatic poet of the fifteenth century known for revising and enlarging "the Mystery of the Passion" composed by Arnoul Gréban. There are three Michels mentioned in connection with this work. Eid, managing director of Aon, said the dawn of commercial space travel "occurred a long time ago." SpaceShipOne is "a continuation of space travel or a drive to explore space. It's becoming more reliable and cheaper, and opening up to the public. But the dream of space exploration, the commercialization of space Commercialization of space is the use of outer space for the purpose of generating a profit, either by a corporation or state. Global positioning systems (GPS), satellite television and satellite radio are current examples of this concept. , has always been alive in the industry," Eid said. Some argue that the dawn of commercial space travel occurred in 2001, when American Dennis Tito Dennis Anthony Tito (born August 8, 1940 in Queens, New York) is a United States multimillionaire who gained celebrity status by becoming the first space tourist to pay for his own ticket, although he himself opposes being called "tourist" and asks to be called an "independent spent $20 million to fly on a Russian Soyuz rocket to the International Space Station, where he stayed from April 28 to May 6, 2001. The second tourist in space was Mark Shuttleworth Mark Richard Shuttleworth (born 18 September 1973) is a South African entrepreneur who was the second self-funded space tourist and first African in space.[1][2] He is now best known for his leadership of the Ubuntu Linux distribution. , a South African who was launched on a Soyuz on April 25, 2002, and re-entered Earth's atmosphere “Air” redirects here. For other uses, see Air (disambiguation). Earth's atmosphere is a layer of gases surrounding the planet Earth and retained by the Earth's gravity. It contains roughly (by molar content/volume) 78% nitrogen, 20.95% oxygen, 0.93% argon, 0. on May 5, 2002, after his stay at the International Space Station. Both men paid about $20 million each for their trips, which were arranged through an Arlington. Va.-based company called Space Adventures. Insurance "is very important," said Eric Anderson Eric Anderson may refer to:
"We're a tour operator or packager ... or an experience provider," Anderson said. "Like a cruise operator, we don't build the boats, we may not captain the boats, but we'll get you on it." Space Adventures also provides other services, such as offering airplanes that travel in a parabolic flight pattern, which allows passengers to experience weightlessness. It also provides astronaut training at a Russian facility, and rides aboard Russian MIGs. "We sec an incredible amount of potential for space development and commercial space travel," Anderson said. Insurers are already involved, he said. "I think the insurance industry ix quite excited about the development of SpaceShipOne," Anderson said. "They'll have a whole new type of experience that they can insure. It's not necessarily that space flight is a risky activity, it's that it has the perception of [being] a risky activity that requires insurance. Certainly, the risks are manageable, but the risks are risks." Aon brokered a sort of "trip-cancellation" plan for Shuttleworth that would have paid for a second attempt to rocket up to the International Space Station if the first attempt failed, Eid said. The policy covered the launch phase, docking and entry into the space station, he said. "It's not similar to any other type of insurance," Eid said. The value of the policy was about $20 million, and the premium ranged from 3% to 5%. Tito was able to buy insurance from the Russian Avikos insurance company, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a company press release. Aon also was involved in providing life insurance for Christa McAuliffe Sharon Christa Corrigan McAuliffe (September 2, 1948 – January 28, 1986) was an American teacher from Concord, New Hampshire who was selected from among more than 11,000 applicants to be the first teacher in space. She died in the Space Shuttle Challenger disaster. , the civilian teacher who died when the Challenger space shuttle space shuttle, reusable U.S. space vehicle. Developed by the National Aeronautics and Space Administration (NASA), it consists of a winged orbiter, two solid-rocket boosters, and an external tank. exploded in 1986. "The [insurance] industry has been prepared to respond to manned flight" Eid said. Eid said he expects there will be adequate capacity. For satellites, there's $300 million to $400 million in available capacity per launch, he said. For third-party liability on satellites, there's more than $1 billion in capacity per occurrence. "There's not much available for space tourism right now, but we expect that to change," Eid said. However, he said he wouldn't predict that insurance capacity for commercial space tourism would skyrocket past the existing capacity for satellites anytime soon. A satellite might be valued about $250 million and its mission is 30,000 miles away. The coverage is more comprehensive for satellites than it's likely to be for space tourism, with satellite policies usually covering the performance of the satellite, not just during the launch, but for a one-year period afterward. It might be counterintuitive coun·ter·in·tu·i·tive adj. Contrary to what intuition or common sense would indicate: "Scientists made clear what may at first seem counterintuitive, that the capacity to be pleasant toward a fellow creature is ... , but insurance for manned space flight would be cheaper than for unmanned space flight, Eid said. "There's more care and technology, more testing with technology, and more redundant systems when a human life is at stake," he said. "I would expect lower premiums." One of a Kind Aon was able to broker a sort of a "hole-in-one" policy for Peter Diamondis, founder of the Ansari X Prize Foundation. For a substantial premium, insurers promised to pay $10 million if an entity was able to build a space craft that could carry three people 62 miles into the air, and successfully be launched twice in two weeks' time. "There was an appetite for this type of risk by the underwriting and insurance community to support this commercialization effort," Eid said. Four years ago, Aon led insurers in examining the possibility that any one of 27 privately funded projects could win the X prize. The insurers were tapped to pay the "claim" after SpaceShipOne's successful flights last fall. As unusual as that particular policy was, a lot of insurance needed to support the fledging space industry is closer to policies that already exist, said Amy Bouska, a managing principal for the Tillinghast business of Towers Perrin Towers Perrin is a global professional services firm. It was established 1 March 1934 as Towers, Perrin, Forster & Crosby. The umbrella name of Towers Perrin was adopted in 1987. and a card-carrying member card-carrying member n → miembro con carnet card-carrying member n → membre actif card-carrying member n → of the National Space Society. "There's a well developed market for satellites already," she said. "The insurance industry has proven itself willing to consider coverage like that; I can't imagine that there won't be capacity for it someplace some·place adv. & n. Somewhere: "I didn't care where I was from so long as it was someplace else" Garrison Keillor. See Usage Note at everyplace. ," Bouska said. A Commercial Space Policy As reusable spaceships become more common, some coverage for commercial space flight will be similar to airplane insurance, while other aspects will be closer to satellite coverage, said Ernst Steilen, head of Space Underwriting at Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. . "Each of these phases represents a different risk, which has to be assessed in each case. Thus coverage is much more similar to satellites," Steilen said in a written statement. "However, satellites normally only have a launch and an in-orbit phase. If space travel were at some point in time to become really commercial and routine, one could imagine that not every single launch would be separately insured, but there would be an insurance in place for the operation of the transport vehicle which would be similar to airplane insurance." Regulators may push to have a liability insurance in place with certain minimum amounts. But as in all other policies, the coverage will have caps, Steilen said. "These caps will be driven by the needs of the insured and the available insurance capacity. Exclusions may develop after more experience is available with regard to space travel," he said. Rules and Regs "The first question is, if you go up, who do you go with? You can't seem to do it without insurance," said CJ. Wallington, who teaches a course on Space Tourism Development at the Rochester Institute of Technology. "The second question is, who regulates it? I'd assume regulations would shape the cost of premium and insurance." The idea of commercial space travel may seem like a possibility light years away for many civilians, but the U.S. government already has taken steps to regulate space travel. The Office of Associate Administrator for Commercial Space Travel, in the U.S. Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control , is charged with licensing the launches of suborbital rockets and reusable launch vehicles This is a list of space launch vehicles sorted by country/operator in alphabetical order, commercial vehicles are listed under their corresponding country.
Brazil
Under a law signed Dec. 23, 2004, by President Bush, the liability limits that had been applied to expendable launch vehicles, such as satellites, will be expanded to include reusable launch vehicles, similar to SpaceShipOne. The Commercial Space Launch Amendments Act, which amended the Commercial Space Launch Act of 1988, allows the federal government to determine the maximum probable loss for third-party liability related to human space travel voyages. Those involved in commercial space travel would have to purchase liability insurance to cover the MPL 1. (language) MPL - An early possible name for PL/I. [Sammet 1969, p.542]. 2. MPL - MasPar data-parallel version of C. See also ampl. Compiler version 3.1. 3. MPL - Motorola Programming Language. as determined by the federal government, but any ultimate losses greater than the MPL would be covered by the federal government. Each MPL will be decided on a case-by-case basis, and while the new law doesn't spell out who would determine the MPL, under the old law, the Department of Transportation was responsible, but delegated the authority to the FAA and the associate administer for space transportation. The amended act also allows commercial operators of space vehicles to require potential passengers and crew to sign waivers stating that they are flying at their own risk, and waive their right to sue the operators. Also, passengers and crew are required to sign a waiver stating they cannot sue the federal government, and must also sign an "informed consent" document, which means they are aware that the vehicle has not been certified as sate by the federal government. The act has been seen by space industry experts as a necessary step in the development of space tourism. "The legislation's passage was a great victory for the future of America's space efforts," Rep. Dana Rohrabacher Dana Tyron Rohrabacher (born June 21, 1947, in Coronado, California) is an American politician, who has been a Republican member of the United States House of Representatives since 1989, currently representing California's At-large congressional district. , R-Calif., who sponsored the bill, said in a statement. "The people who will invest the type of big dollars necessary to make this a major new step in mankind's ascent into space have been waiting for the government to lay down the regulatory regime and set the rules of the game, and this is the first major step toward doing that." Learn More Munich Re Group A.M. Best Company #86577 (Muenchener Ruecksversicherungs) Distribution: Direct and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. brokers For ratings and other financial strength information about these companies, visit www.ambest.com. Prizes are Mother of Invention Today's $250 billion aviation industry got off the ground, in part, thanks to large monetary prizes that private companies, foundations and individuals offered to early aviators Well-known aviators People largely known for their contributions to the history of aviation While all of these people were pilots (and some still are), many are also noted for contributions in areas such as aircraft design and manufacturing, navigation or . Today, there's a resurgence of interest in offering large prizes to encourage the private market for space travel. In the early days of flying, governments, individuals, newspapers and major corporations offered more than 50 major aeronautical aer·o·nau·tic also aer·o·nau·ti·cal adj. Of or relating to aeronautics. aer  o·nau prizes. Perhaps the most famous came from hotel magnate Raymond Orteig Raymond Orteig (1870 - 1939) was the New York City hotel owner who offered the Orteig Prize for the first non-stop transatlantic flight between New York and Paris.Orteig was born in the south of France, in Louvie-Juzon, Bearn, but emigrated at 12, arriving in New York on , who offered $25,000 to the first person to fly non-stop between New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Paris. In 1927, Charles Lindbergh did just that and the world suddenly seemed much smaller. Within a year of Lindbergh's flight, the number of pilots tripled in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the number of airplanes quadrupled. Also, the number of passengers skyrocketed to 180,000 annually from 6,000. The Orteig Prize The Orteig Prize was a $25,000 reward offered in 1919 by hotel owner Raymond Orteig to the first allied aviator(s) to fly non-stop from New York City to Paris or vice-versa. On offer for five years, it attracted no competitors. stimulated not one, but nine separate attempts to cross the Atlantic, according to the Ansari X Prize Web site. To initiate the flights, competitors raised and spent some $400,000, or 16 times the amount of the prize. The Ansari X Prize, which SpaceShipOne won last fall, offered $10 million to the first person to create a vehicle that could hold up to three people and fly 62 miles above the Earth, into suborbital altitude. More than 20 teams competed for the prize. The prize money was financed through insurance. "Today if you are interested in flying, there are only two options, the U.S. Space Shuttle or the Russian Soyuz, and neither of these is available at a reasonable cost or on a regular basis to the general public," Peter Diamandis Peter H. Diamandis (born 20 May 1961 in Bronx, New York) is considered a key American figure in the development of the personal spaceflight industry, having created many space-related businesses or organizations. , chairman and president of the X Prize Foundation in St. Louis, said in a statement. "The problem is not the lack of financial resources among today's adventure tourists, nor the demand in the marketplace, but specifically the lack of licensed, low-cost, reliable vehicles. Taking a lesson from the history books, we modeled the X Prize after early aviation prizes." Other modern space flight prizes include the $50 million being offered by Robert Bigelow, who owns Budget Suites of America Budget Suites of America is a hotel chain spanning the U.S. states of Arizona, Nevada, and Texas owned by Robert Bigelow. It caters to budget-minded travelers needing to stay for an extended period. Its rooms are primarily suites featuring a full kitchen. , for the first person to build a craft that can carry five people into orbit. Bigelow, who also owns Las Vegas-based Bigelow Aerospace, is working on building a private space station that would function as an orbiting hotel. Similar plans for orbiting hotels or space stations also are in the works. "We're not just talking about the edge of the atmosphere or a two-to-three hour flight," said C.J. Wallington, who teaches a course on Space Tourism Development at the Rochester Institute of Technology. "When we first started this class, we thought it would be about 10 years before we'd see actual space tourism. It's coming tree faster than we thought." Facts About Commercial Space Space may be infinite, but here are some finite statistics about it: $585 Billion U.S. launch revenue for fiscal year 2004 (October 2003 to end of September 2004) 4 Number of private space launch sites in the United States $95 Billion Economic activity related to commercial space operations, including telecommunications, global positioning systems and other satellite-based services in 2002 $23.5 Billion Earnings stemming from commercial use of space in 2002 576,400 Jobs related to commercial space in 2002 1 Month's Salary What 60% to 80% of people surveyed in Japan, Canada, the United States and Europe said they'd be willing to pay to travel to space just once 3 to 1 How much NASA's over-60 staff outnumbers its under-30 staff $20 Million What Mark Shuttleworth and Dennis Tito each paid for their trips to the International Space Station via a Russian rocket $600,000 to $1 Million What Shuttleworth paid to buy a "trip insurance" policy on his jaunt into space. Source: Federal Aviation Administration, National Space Society, Aon Space Insuring Space Flight Insuring space tourism could require dividing a trip into space into different phases: * Launch phase, from intentional ignition (or lift-off) to reaching target orbit * Re-entry RE-ENTRY, estates. The resuming or retaking possession of land which the party lately had. 2. Ground rent deeds and leases frequently contain a clause authorizing the landlord to reenter on the non-payment of rent, or the breach of some covenant, when the phase, from leaving target orbit until landing on Earth * In-orbit phase * In the event of a stay in a space station or in a space hotel-- * Docking to space station/space hotel * Undocking from space station/space hotel In addition to coverage for specific phases of the space trip itself, other types of coverage that could be available or needed include: * Asset coverage for partial or total loss of transport vehicles and/or space stations/space hotels * Business interruption coverage for transport vehicles and/or space stations/space hotels * Loss of revenues coverage for transport vehicles and/or space stations/space hotels * Product liability coverage for the manufacturers of transport vehicles and/or space stations/space hotels * Third-party liability for the operation of transport vehicles and/or space stations/space hotels * Life/accident insurance * Workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. for pilots Sources: Munich Re Group; Tillinghast business of Towers Perrin; Aon Space |
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