The term “NewSpace” is often used within the space industry to define an approach that is focused on lowering the barriers of entry into the industry, by providing cheaper and often quicker access to space (Rocket labs with their launchers and AAC Clyde Space with their cubesats are small examples of this). This in turn provides more high-quality and affordable data from space that can be put to use in a timelier fashion, for the ultimate benefit of the end user.
To achieve this, NewSpace has forced people to think outside of the box, fuelling innovation (such as 3D-printed parts, software-defined satellites, and the extended use of Commercial Off-The-Shelf (COTS) components/products).
One of the major characteristics of the NewSpace era is the fundamental shift from an industry which was heavily dependent on government agencies (and taxpayers’ money) to a more agile and independent private sector that relies on innovation, working with much smaller budgets than the more traditional space industry.
With the advent of nanosats, cubesats and launchers specifically designed for these small satellites, access to space is dramatically simplified in term of cost and time to launch. This is driving a significant evolution in the industry as it allows satellites to be used to test technologies and missions, deliver proofs of concept, rapid prototyping etc.
Both the manufacturing of satellites and launchers but also their procurement and operation is evolving, challenging past norms and standards.
As a result, we have seen launches with close to 100 small satellites being deployed, whilst constellations with thousands of satellites are being deployed with what will become hundreds of launches. This poses several challenges to the insurers, who (i) cannot afford to study each satellite due to the low values involved; (ii) have no way to distribute the insurance product to potentially thousands of clients outside the normal space ecosystem; (iii) struggle to provide a product to meet the clients’ risk mitigation requirements which typically do not respect traditional insurance class dividing lines; (iv) would not be able to manage a high number of policies and potentially ensuing claims.
The Bifrost facility – a multi-risk, multi-mission insurance facility for the NewSpace segment.
Aesir has developed the Bifrost facility to respond to the emerging NewSpace market.
In Norse mythology, Bifrost was a rainbow which connected the realm of humans with the realm of the gods. For us, Bifrost is an insurance facility which seeks to enable and assist NewSpace initiatives to succeed by providing an efficient means of mitigating a broad range of risks which most projects face.
The Bifrost facility achieves this through the following principles:
- Ease of administration: Coverage within the facility is automatic and do not need constant updates to be provided to the Insurers regarding change of schedule, change of values or even change of launch vehicle. Additional launches, transits etc. are automatically covered. Premium payments are regular and only adjustable at the end of the policy period. The Insured can focus on what he does best, not on managing his insurances.
- Alignment of interests: Benefits of low losses are shared with the insureds, giving low premiums.
- Cost certainty: The facility includes guaranteed maximum rates for future years, facilitating budgeting and providing cost certainty not just for the policy period but also for the year after.
- Cost efficiency: Grouping AIT, Transit, Pre-launch, launch and post-separation risks into a single policy allows economies of scale not available when the same covers are procured separately.
- Coverage extension: The overall volume of the facility allows Aesir to propose post-separation covers which are typically not available in the market.
Bifrost is an annual facility accepting any number of declarations, each declaration typically being for a project across a range of perils, including AIT, pre-launch, Launch and In-Orbit as well as associated liabilities. Bifrost includes predefined rates and automatic acceptance of declarations which fall within pre-agreed limits.
For some examples of how Bifrost has been deployed, click here.