The final insurance frontier: Hong Kong spots opportunity in mainland China’s space boom

The final insurance frontier: Hong Kong spots opportunity in mainland China’s space boom Like maritime trade centuries ago, the space economy is built on high-risk, high-value journeys. Hong Kong wants to be its insurance hub Elon Musk’s recent record-breaking SpaceX IPO has thrust the space economy into the financial mainstream, but mainland China’s trillion-yuan commercial space sector remains strikingly underinsured – a gap industry insiders say presents a rare opportunity for Hong Kong. On the mainland, only third-party liability insurance is mandatory for commercial space activities. Coverage for research and development, manufacturing, testing, launches and in-orbit operations remained largely optional, according to Li Zhizhong, an academician at the International Academy of Astronautics. Yet failures can carry enormous financial consequences. In 2023, the global space insurance industry paid out about US$1 billion in claims from unexpected failures, despite collecting only around US$550 million in annual premiums, according to industry publication DatacenterDynamics. Those losses have kept premiums prohibitively high. “Standard satellite launch insurance premiums typically hover around 15 per cent of a mission’s value, while coverage for the first three launches of any newly developed rocket rises to between 18 and 20 per cent,” Li estimated.