One small step for insurers
Space travel is the future. Ian Youngman boldly goes where no travel insurer has gone before
First published in ITIJ 86, March 2008
Space travel is the future. Ian Youngman boldly goes where no travel insurer has gone before
Until recently, space travel has been the prerogative of highly trained professionals working for their country's space missions. But now, a new kind of space adventurer is emerging, and thousands of these potential travellers are expected to realize their dream of journeying into space within the decade – which is mind-blowing as in all history there have only been 450 astronauts. Hundreds of space travellers have already signed up with private space travel companies, but it costs. US$100million will get you a flight around the moon; a mere $30 million will take you to the International Space Station (ISS) aboard a Russian Soyuz capsule; or for $200,000, you can embark on a sub-orbital space adventure with Virgin Galactic.
A great deal has been written about opening up space travel by the twenty or so private space companies offering trips into orbit to any individual with enough money to pay the fee; but the question of travel insurance for their customers is something they haven’t really thought about despite a number of high-profile accidents involving space travel. Here, we will look at what it takes to make it into space, and why the physical demands of such travel, as well as its other associated risks, make it a prime investment for potential passengers and for existing travel and health insurers.
On the launch pad
As an astronaut, to travel into space you must have had years of training and be at a superb level of fitness. But if you are paying for your flight, as long as you are over 18 and healthy, you’re pretty much in. Some space travel companies do include training for would-be astronauts in their offer, but not all. This cavalier attitude may be one reason insurers are not rushing to offer space travel insurance. With the cost of a flight being up to $30 million, insurers may also question what point there is in offering travel insurance to someone who can spend that sort of money for a one-off event.
Nevertheless, travel insurance does and will continue to exist for space travellers, especially in the future as the cost of such travel comes down. So, just how physically taxing is space travel and what should insurers be covering for?
Professional astronauts must follow a course of twelve years of study and five years of training to get them into peak condition for space. The living conditions aboard a space shuttle are extremely testing, so it is necessary to be in the same physical form as an athlete before a sporting competition. The programme for space tourists, however, is equivalent to a few workouts at the health club, while those tourists wishing to remain in an international space station for a week need little more than a thorough medical examination in order to make sure they have no existing health problems. Simulators help get potential space tourists accustomed to the extreme force of gravity they will feel during acceleration on take-off and the return into the atmosphere, but the toughest change is weightlessness during flight.
Getting the product right will take time, but travel and health insurance for space voyages is on its way
Thus, space voyages can have important effects on the health of an individual. Among the various symptoms felt by tourists in space is an extreme version of sea sickness, where the body and brain lose orientation. Furthermore, the absence of gravity, especially if it is prolonged, causes bones to weaken – in fact, astronauts find their spinal column lengthening by several centimetres. Also, blood gets pushed up towards the brain so there can be a marked temporary deformation of limbs and face. Radiation from the sun can also be dangerous as in space it is much stronger than on Earth. Although scientists and experts regularly improve techniques for space travel, it will be a long time before we can travel in space with the carefree attitude with which we ride on the aircraft of today.
Insurance to skyrocket
At the time of researching this feature, an explosion had just occurred at a space training site resulting in a number of unfortunate deaths. The accident sharply reminded people that space travel is not a game and should not be taken lightheartedly. It also brought into focus that the risks of space travel can be as much about risks on the ground during training, pre-launch and launch as the shorter time actually spent in space. An insurance world already very nervous of the subject saw their worst fears of space travel being unsafe confirmed. This suddenly and drastically reduced the number of people prepared to even discuss the possibility of space travel insurance.
BUPA Travel's entry into the space market last year was a widely publicized event, but the company has no plans to begin offering this cover for some years and has yet to research the market fully. Nick Potter of BUPA Travel Insurance told ITIJ: “There is not yet a market for [space] insurance and the actual travel opportunities are so niche at this point that premiums could be extremely high. Once the phenomenon is more mainstream, it will be much easier to assess how we would provide cover.”
Elsewhere, a Japanese company will reportedly begin offering travel insurance to space travellers this year. The space travel industry has been kick-started in the country by JTB Travel Agencies, which has the franchise in Japan for Space Adventures and expects to send 11 Japanese into space this year. The company itself will not offer travel insurance, merely life insurance underwritten by Lloyd’s underwriters. Stacey Tearne at Space Adventures Ltd, the only company so far to send people into space told us: “Clients must arrange their own [travel] insurance. We do not offer and have no plans to offer insurance.”
Another high-profile space tourism company, Richard Branson’s Virgin Galactic, is working with an insurer, but it is not clear if the insurance only covers the space vehicles and company operation, or whether it includes travel insurance for those travelling into space. We understand, however, that negotiations with the insurer are still at an early stage with nothing yet finalised.
Overall, the global space travel market has around fifty companies involved in offering trips to individuals. In a frontier industry, funding is crucial, so companies do appear and disappear, or never become more than a hope; but 20 of these companies claim to be close to offering space travel. Observers suggest, however, that no more than half a dozen will actually launch. So, when considering the concept of travel insurance it has to be remembered that, so far, few space stations, spacecraft or other facilities have got beyond development stage. The space travel companies, therefore, have nothing much to insure – think of an airline industry with no planes, no flight crew and no airport.
This means travel insurance is still way down the list of priorities but insurers are starting to think about what would be needed in a space travel policy, as the time is coming ever closer to when journeys beyond the Earth’s atmosphere will become more common. Details such as cost, basis of premium, cover and wording are still unknown, but BUPA suggests that baggage and cancellation might be covered. Repatriation and rescue seem to be non-starters, as calling upon an air ambulance is not going to be an option … yet. This seems to leave medical expenses as the main concern. An accident in space may be fatal, which is where the need for life assurance comes in. But travelling into space can affect the body in many ways, so the real concern must be about permanent or long-lasting injury or illness brought about either from an accident in space or just as a result of space travel. Conventional health cover on travel policies is not going to be enough here: we may well be looking for a hybrid travel/life/critical illness/long-term-care policy for space travellers.
If you can afford the fee for space travel, though, you are not going to be concerned about the small losses that much of a travel policy is about. This leaves liability, but that really is the responsibility of the space travel company. Even if space travel sends a normally sane person so crazy that they crash the spaceship, liability is unlikely to fall on the individual.
The reality of space insurance is that the expertise is in London, mainly at Lloyd’s. Barry Stiff, associate director in the Aerospace Reinsurance division of Health Lambert has been following developments and advises that apart from public liability cover, no other insurances have been arranged, including travel insurance: “Insurance for space travel companies and tour operators is still being discussed. Third party liability will be offered by the traditional aviation/space insurers.” Space travel is not just air travel in space, so the expertise and skill at developing innovative cover is currently still with the space insurers and reinsurers.
Understanding the market
Other companies may have a higher profile, but so far only one company has sent people into space as space travellers: “Space Adventures is the first and only company to have arranged for self-funded private individuals to fly to space,” explains Stacey Tearne. The price of an orbital spaceflight is US$30 million. Each candidate must be in good general health and over 18 years of age. Stacey adds: “Our first client launched to the ISS in April 2001. Since then, four other Space Adventures clients have flown.” The Virginia, US, based firm will launch two space tourists to the ISS on a Soyuz spacecraft during separate Russian missions this year and in 2009 – one of which may include the first private spacewalk. Eric Anderson, president and CEO, also has two passengers each willing to pay $100 million for a ride around the moon aboard a modified Russian spacecraft.
The latest company to boldly enter the space business is new space tourism company Galactic Suite Project, which will provide journeys into space for $3 million, with tickets going on sale this year. The price includes 18 weeks’ training on a Caribbean island, the journey into space, and three nights' accommodation in the orbital Galactic Suite Hotel where visitors will participate in international space experiments. The Barcelona-based company is aiming to develop an orbital hotel chain with modular space accommodation that will orbit the Earth at an altitude of 450 kilometres, and will welcome its first guests in 2012.
Safety first
In late July 2007, there was a massive explosion at the Mojave Air and Space Port, California test site of a pioneering company designing commercial spaceships, that exposed the inherent dangers in rocket science that have been recently overshadowed by the prospect of adventurous space tourism. The accident, which killed four workers, happened two years after Scaled Composites began designing its suborbital spaceship for British tycoon Richard Branson, who hopes to commercially fly tourists into space by next year. Video news helicopters showed wrecked equipment and vehicles at the airport in the high desert north of Los Angeles, near Edwards Air Force Base.
The tragedy threatens Virgin Galactic, although the company does not agree. The blast, which spewed toxic nitrous oxide into the air, is still under investigation. It happened during a routine test of the propellant flow system for SpaceShipTwo, which is powered by a hybrid rocket motor that uses nitrous oxide as an oxidizer to provide the oxygen that rocket fuel needs to burn. The early enthusiasm about commercial spaceflight may have been tempered by the explosion, and while Branson has said commercial flights will be delayed from 2008 to 2009, his secretive partner Bert Rutan refuses to set a timetable. Several hundred intending passengers have already indicated a willingness to pay $200,000 apiece for a reservation, however.
SpaceShipTwo is a small carbon fibre craft designed to carry seven passengers up to 65 miles above the earth, travelling at a speed of about 12,000 miles per hour. Entering the edge of space, those onboard will experience weightlessness for about 15 minutes before beginning the journey back to earth.
Virgin Galactic estimates it will fly 500 paying customers in its first year, and 500,000 by its tenth year. This is sub-orbital space tourism. The company says it was established to undertake the challenge of making private space travel available to everyone and to create the world's first commercial ‘spaceline’. It will own and operate privately built spaceships, where there will be no need for special expertise or exhaustive, time-consuming training. There will be some pre-flight medical checks, and the company says that the vast majority of people who want to fly will not be prevented from doing so by health or fitness considerations. Virgin Galactic's space flights will initially operate from the Mojave Spaceport; later from the world's first purpose built commercial spaceport, Spaceport America in New Mexico; and later still at other potential spaceport locations around the world, including Spaceport Sweden at Kiruna Airport
We are talking at least 10 to 15 years before commercial space travel becomes an established reality, with regular flights
Imtiaz Longi, joint head of the travel group at accountancy firm Vantis comments: “Space travel is at least eight years away, and when the concept does become a reality the market opportunity will not be very large, mainly due to the astronomical cost of the actual trip … More ominously, there does not seem to be any criteria set for people wanting to travel into space from an insurance perspective … In my opinion, Richard Branson's plans to commence space travel in 2009 are a little premature.”
T minus 10
In June 2007, EADS Astrium announced it would be entering the space tourism sector and unveiled a model of its space rocket, a one-stage hybrid craft utilising both jet and rocket engines. Carrying four passengers, the space jet will take off from regular airports using conventional jet engines, and once at the appropriate altitude its rockets will be fired. When reaching its final altitude of around 37 miles, passengers will experience weightlessness for three minutes. Tickets are expected to cost up to €200,000 with flights likely to begin in 2012.
The Canadian Arrow is a privately funded rocket and space travel project founded by London, Ontario, and Canada-based entrepreneurs Geoff Sheerin, Dan McKibbon and Chris Corke. The project's objective is to take civilians into outer space on a vertical sub-orbital spaceflight reaching an altitude of 112 km. The Canadian Arrow is a 16.5-metre-tall two-stage rocket, where the second stage is a three-person space capsule. The Canadian Arrow team's somewhat conservative approach has been to base the design of their rocket engine and aerodynamics on the well proven V-2 design from WWII. The company has created the PlanetSpace Corporation through which it will complete the construction of its spacecraft, and within 24 months offer suborbital space flight to aspiring space tourists. Planetspace expects to fly about 2,000 new astronauts in its first five years of operation. The price is expected to be $250,000 for each flight, including fourteen days of training. Cape Breton Island, in Nova Scotia, is being considered as a launch site.
Roger Anderson of SpaceX details another contender: “Our current NASA programme is to demonstrate delivery of cargo to the ISS and we are working on the options for crew carrying as well.” Mojave, California-based XCOR, meanwhile, which is building a reusable suborbital vehicle named Xerus hopes passengers will pay thousands of dollars to ride on the single-passenger rocket and experience up to three minutes of weightlessness some 100 km above Earth. Armadillo Aerospace is another aerospace start-up company based in Mesquite, Texas. Its initial goal is to build a manned suborbital spacecraft capable of space tourism, but it has stated long-term ambitions of orbital spaceflight. AeraSpaceTours will operate a first generation suborbital spacecraft, which is vertically launched, lands horizontally and can send seven passengers to space. Rocketplane Kistler will build reusable rockets that dramatically cut the cost of launching payloads into space. The company initially planned rockets to travel to the ISS, but the company has failed to find private investors and may fold.
A giant leap into the future
Space travel is here. Space travel insurance will follow suit. It is a bit like the early years of commercial aviation, where the industry contains a high proportion of dreamers, and some of the space travel ideas are about as likely to succeed as some early attempts to fly were. Others look practical and possible. We are talking at least 10 to 15 years before commercial space travel becomes an established reality, with regular flights, but however you look at it transferring the logic of travel insurance for air travel into that for space travel is not a simple adjustment – for a start, there are health factors with space travel that travel insurers alone cannot protect. But insurance is needed for this emerging market, and it will develop, even if reinsurance and capacity restrictions will mean that for at least the first few years the only insurance available to space travellers will be from Lloyd’s of London. Getting the product right will take time, but travel and health insurance for space voyages is on its way, with underwriting tailored to the new breed of astronauts that will undoubtedly be able to afford the premium.