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

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By our reporter Leng Cuihua Yang Xiaohan

At the start of this year, a wave of financing enthusiasm has surged in the commercial spaceflight sector. In February, multiple companies—including Xingji Rongyao, Jianyuan Technology, and Xinghuo Space—completed fundraising one after another. The intensive capital layout has accelerated the pace of building liquid launch vehicles, reusable technologies, and the entire industrial chain.

Driven by both policy and market forces, commercial spaceflight is speeding up its transition from the “state-led” single-track model and into a diversified development pattern in which market-oriented entities actively move in. However, as the industrial map expands rapidly, the risk exposure for launch and operations also grows larger. Faced with high trial-and-error costs, commercial spaceflight’s rigid demand for risk hedging is rising quickly.

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

A demand for risk hedging in a trillion-yuan-level market

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

At the macro level, the “Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development” issued by the Communist Party of China’s Central Committee lists aerospace and aviation as a strategic emerging industry cluster. In November 2025, the National Space Administration specifically established a Commercial Spaceflight Department, and in the “National Space Administration Action Plan for Promoting High-Quality and Safe Development of Commercial Spaceflight (2025–2027),” it mentioned establishing a compulsory insurance system for commercial spaceflight activities.

In terms of industrial layout, the development space for commercial spaceflight in China continues to expand. From December 25 to December 31, 2025, China submitted to ITU (International Telecommunication Union) applications for frequency and orbital resources for an additional 203,000 satellites.

Policy dividends combined with market expansion are driving commercial spaceflight toward explosive growth. Data from the China Center for Industrial Research shows that from 2020 to 2024, China’s commercial spaceflight industry output value grew from 1 trillion yuan to about 2.3 trillion yuan. Meanwhile, in 2025, China executed 92 space launches in total, of which 50 were commercial launches—marking the first time the share exceeded 50%.

The rapid expansion of industry scale also means that launch risks and complexity rise in tandem. Hedging demand is becoming increasingly urgent, making the “stabilizer” role of commercial spaceflight insurance more and more prominent.

A relevant executive from the People’s Property Insurance Company (hereinafter “PICC Property and Casualty”) said to reporters from The Securities Daily that insurance is an important production factor in the commercial spaceflight industrial chain. Through its professional loss-compensation function, it provides stable support for enterprises’ continuous reproduction. Insurance can offer one-stop solutions for the entire industrial chain, including property, personnel, liability, and freight.

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 risks—it can also drive supply-chain upgrades. For example, requiring satellite manufacturers to purchase product quality liability insurance would pressure them to improve product reliability. At the same time, risk data accumulated by insurers can also feed back into technical iteration, ultimately forming a closed loop of “insurance—data—improvement.”

Yang Fan, general manager of Beijing Paipaiwang Insurance Brokerage Co., Ltd., added that insurance can also effectively strengthen companies’ financing credit. In the financing field, satellite assets often have characteristics such as high value, high risk, and difficulty of supervision, which means traditional financial institutions cannot directly use them as collateral. A well-improved insurance solution can cover the full life-cycle risks of satellite launches and operations in orbit, turning satellite assets into qualified collateral that banks can accept. This “insurance + financing” model has already been widely used in the industry, helping multiple companies complete large-scale constellation networking through bank loans.

Co-insurance and reinsurance combine strength to disperse risk

Given the characteristics of commercial spaceflight underwriting targets being high-value and high-risk, the insurance industry mainly adopts “pooling” approaches such as co-insurance and reinsurance, using joint efforts to disperse risk.

Co-insurance is the first transfer of risk. Multiple insurance companies jointly provide insurance coverage for the same underwriting target, sharing the risk together. Reinsurance is the second transfer of risk. It refers to the insurer transferring part of the insurance business it bears to other insurers in the form of reinsurance, further dispersing its own risk.

From practice, in March 2025, guided by the relevant regulatory authorities in Beijing, 17 property and casualty insurance institutions, 2 reinsurance institutions, and 1 insurance intermediary institution in the Beijing region jointly formed the country’s first commercial spaceflight insurance co-insurance pool—“Beijing Commercial Spaceflight Insurance Co-Insurance Pool.” This means that China’s commercial spaceflight insurance risk-sharing framework has entered a new stage of professional development.

According to a relevant executive from the Beijing Regulatory Bureau of the National Financial Regulatory Administration, the above co-insurance pool adopts a two-tier structure of “direct insurance + reinsurance” in its organizational framework to ensure that overall underwriting capacity is stable, reliable, and solid. Based on setting admission thresholds, the membership structure is dynamically adjusted, and different spaceflight projects’ risk characteristics and insurance resources are matched flexibly. In terms of service systems, through a linked model of “property and casualty insurance + intermediaries,” it provides spaceflight enterprises with a one-stop insurance solution.

The data shows that since the Beijing Commercial Spaceflight Insurance Co-Insurance Pool was established in March 2025 until the end of that year, it provided risk protection of nearly 7.7 billion yuan for 17 space-launch projects.

A “low share, high rate” dilemma awaiting resolution

Although the market outlook is broad, commercial spaceflight insurance still faces many constraints during actual implementation.

A person in charge from the Important Customers Department of Sinai United Property & Casualty Insurance Co., Ltd., Yin Yao Peng, said that the commercial spaceflight insurance currently operated by his company mainly has two categories: first, satellite insurance, covering launch and initial operations insurance, as well as in-orbit lifetime insurance; second, rocket insurance, including pre-launch insurance, launch insurance, and third-party liability insurance for satellite/rocket launches, providing comprehensive coverage for risks across the entire process—from pre-launch testing and commissioning to in-orbit operations.

The above-mentioned relevant executive from PICC Property and Casualty said that in the development of China’s commercial spaceflight, various kinds of risks will gradually become visible, with both challenges and opportunities intertwined. On the one hand, low-orbit satellite constellations are accelerating, and dense first flights using reusable heavy-lift rockets are becoming frequent, taking space launches into a high-density and normalized stage. As technology iteration compresses the validation cycle, unknown risks brought by multiple innovative technologies continue to expand. On the other hand, supply-chain diversification increases the difficulty of quality control; new risks keep emerging, such as collisions involving space debris and safety risks in the landing area. These risks show a “the more aggressive the technological innovation, the more complex the risk chain” characteristic, posing significant challenges to the underwriting capacity of co-insurance pools and to risk-control efforts.

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

With multiple factors overlapping, to a certain extent China’s commercial spaceflight insurance market has encountered an awkward situation of “low share, high rates”: the insured amount provided is far lower than the actual build cost of rockets and satellites, while enterprises’ premium costs remain high.

The above-mentioned executive from Sunlight P&C analyzed that behind the phenomenon of “low share, high rates” there are multiple reasons: first, risks are highly concentrated. At present, domestic insurers’ retention capacity is limited. To prevent pressure from large-scale claims, they can only adopt a defensive strategy of reducing insured amounts and increasing rates. Second, the industry still lacks unified risk assessment standards and an information disclosure mechanism, making it difficult for insurers to accurately “profile” the risks, so they can only price conservatively. This objectively reflects that the market is still at an early stage.

From “paying the bill afterward” to “risk co-governance”

Given the many limitations of the early-stage market, commercial spaceflight insurance urgently needs to integrate deeply with the industrial chain—upgrading 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 limited to being the “payer” after an accident occurs, but also be reflected in risk early-warning at the front end. By establishing underwriting and risk-control standards independent of R&D testing, insurers can identify hidden hazards in the manufacturing process. This mechanism of “using insurance to promote R&D and to promote improvements” can reduce the probability of risks from the source.

A relevant executive from PICC Property and Casualty also told reporters that there is a prominent misconception in the commercial spaceflight insurance sector: it overly equates insurance with a “risk transfer” tool, focusing one-sidedly on premium and insured amount while ignoring the strong correlation between insurance rates and indicators such as rocket reliability and number of launches, and also overlooking that insurance is a full-cycle and long-term risk management tool. To break the stalemate, it is necessary to clearly define insurance’s position as a long-term risk management tool and build a coordinated model of “risk co-governance + shared data building + industry enablement.” By deeply binding with enterprises, it helps them improve risk control, accumulate data, and iterate technology, ultimately achieving a win-win outcome.

Looking ahead, a relevant executive from Sunlight P&C said that with industry maturity, the accumulation of risk data, and the improvement of industry standards, insurance pricing will inevitably move toward greater refinement and differentiation. At the same time, as domestic enterprises take on more international launch orders, China’s commercial spaceflight insurance services will also accelerate “going global,” deeply participating in global reinsurance systems. While aligning with international standards, it will continuously enhance its international discourse power.

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