Satellite firms urge risk-based insurance

Australian satellite companies are urging policymakers to further overhaul insurance requirements.

Flavia Tata Nardini from Fleet Space poses for a picture with their nano satellite prototype. Picture: AAP

Australian companies wanting to launch small satellites to tap a sector worth hundreds of billions of dollars are urging policymakers to further overhaul insurance requirements.

A bill to amend the decades-old Space Activities Act, which is before a Senate inquiry, reduces the insurance requirements for any company wanting to launch an object into space from a minimum of $750 million to not more than $100m.

But while welcoming the lower insurance requirement, the industry is pushing for access to a risk-based approach and some say the cuts should go further.

Hypersonix, set up to commercialise hypersonic technology developed at the University of Queensland, says a blanket requirement for $100m of insur­ance “could result in an ins­urance premium that is a sig­nificant percentage of the launch cost”.

“This must be passed on to customers and could make launch from Australia uncompetitive,” founder and chief technology officer Michael Smart says in a submission to the inquiry.

The law is designed to slash red tape and tap a sector worth more than $US345 billion ($466bn) globally.

It follows a review of the Space Activities Act that concluded in 2016 and comes as the Australian Space Agency spends its first few months developing its strategy.

The Australian arm of Italy’s Sitael, which focuses on the small satellites sector, says the $100m figure “could be further reduced to encourage industry growth”.

South Australia-based Fleet Space Technologies, which is developing nanosatellites, has called for a “risk-based approach” that takes into account the launch, orbit and operational plans of a mission.

“We are convinced that the current industry trend for ‘piggyback’ or ‘ride-share’ launch ser­vices will continue to expand, and it is in the interests of Australia for its companies to be able to access such services with the minimum of time, paperwork and insurance cost,” Fleet chief Flavia Tata Nardini says in the firm’s submission.

“As a customer of such piggyback launch services Fleet feels (it) is quite unnatural to have the insurance risks related to the rocket launch lumped in with the risks of collision during deployment and on-orbit operations.”

Southern Launch has raised concerns that the new legislation could impose the $100m insurance requirement on high-power rocket flights.

Its submission says while the intent is to simplify insurance requirements, as written the update could increase insurance requirements for high-power rocket flight.

“Subsequently we believe the inclusion of high-power rocket flights into this single insurance mechanism will stifle Australian research, development and manufacture of rocket technology, and ultimately result in the relocation of such activities to other countries with more reasoned insurance requirements.”

Sydney-based Asia Pacific Aerospace Consultants says the proposed changes bring the Australian requirements for insurance into “the range” of jurisdictions such as the US, Britain and France.

But it warns this masks the fact premiums are “extremely high” compared with the costs of a cubesat that is worth between $200,000 and $700,000 before launch costs.