UK insurer Pembroke Managing Agency, who recently began offering life coverage for would-be space tourists, said it has seen no increase in interest in the policy following the fatal crash of a Virgin Galactic test space ship last month.
The policy, sold by Pembroke, pays up to $5 million per traveler or $20 million per suborbital space flight, parent Ironshore International said in announcing the policy in June.
“The policy has not sold yet and the initial response has been slow,” Anthony Ruddell, a personal accident underwriter at Pembroke, said in an interview, noting Pembroke spreads the risk through a Lloyds syndicate. “But we anticipate lots more interest closer to when the first flights take off,” he added.
Virgin Galactic had expected to carry tourists by March 2015, founder Richard Branson said, but the timeline lengthened after the company’s SpaceShipTwo broke up during a test flight over the Mojave Desert in California on Oct. 31, killing one of two pilots.
There are no suborbital space tourists yet, and insurers have so far not excluded the activity from coverage as they do with hang gliding, skydiving and other hazardous avocations. That means life policies already in existence are likely to pay out if a space tourist eventually dies on a flight.
But insurers are expected to rethink and possibly change policies to ask about or exclude space tourism as the 62-mile-high (100 km) rides join other “extreme sports,” albeit at a hefty price.
“We anticipate that when space tourism flights begin this may well be added to the list” of excluded activities, Ruddell said. “Our product is designed to cater for these types of exclusions,” he said.
Ruddell acknowledged that with tickets costing $250,000 on Virgin Galactic, the market will be limited initially. Pembroke does not have an estimate of the potential market size, he said.
“However, as space tourism advances and develops, the potential for the market to grow is huge,” Ruddell said. “The sky’s the limit.”
Ruddell did not comment on prices, but they are expected to mirror those of satellite policies costing between 2.5 percent and 10 percent of the insured amount, meaning premiums for tourists of between $25,000 and $100,000 for a $1 million policy.
The Virgin Galactic crash destroyed a space craft made by Scaled Composites, a unit of Northrop Grumman Corp, that was being flown by Scaled Composites test pilots. U.S. investigators are focusing on pilot error as possible cause.
Virgin Galactic, an offshoot of Branson’s London-based Virgin Group, now hopes to finish building a second SpaceShipTwo in mid-2015 and begin test flights before the end of the year.
(Reporting by Alwyn Scott; Editing by Steve Orlofsky)
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