Understanding and mitigating the impacts of space-related risks

The Chief Risk Officer Forum (CRO), a group of professional risk managers from the insurance industry including Allianz Commercial experts, has launched a new report on space-related risks.

Numerous critical infrastructures on Earth, such as telecommunications, power grids, and financial networks, are heavily dependent on space-based assets like satellites and Global Positioning Systems (GPS). Failures in space infrastructure, whether due to natural phenomena or human-induced factors, can lead to substantial disruptions across these essential terrestrial systems, resulting in significant economic losses.

The cascading effects from damage to a single satellite or space system can ripple across multiple industries, causing failures in transportation networks, emergency response systems, supply chains, and other critical sectors. This creates complex, interconnected claims that insurers must anticipate and manage.

From the perspective of the (re)insurance industry, space risks impact more than just companies that insure space operations. While insurers do not directly operate space systems, they exert considerable influence through risk assessment, underwriting practices, and policy conditions. This influence encourages actions to enhance resilience among operators of both space infrastructure and terrestrial infrastructure, which are most vulnerable to space risks.

This position paper was developed in collaboration with the European Space Agency (ESA), facilitating the collection of valuable insights and technical details related to forecasting and monitoring space weather events.