0191-9067/83 $3.00 + .00 Copyright ‘ 1983 SUNSAT Energy Council INSURANCE OF MAJOR SPACE PROJECTS DEREK FRASER Swiss Reinsurance Company 29 Mincing Lane London. England EC3R 7EE Abstract—Unique projects present a fundamental problem to insurers. Total coverage of speculative risks would endanger the security of the organisation offering the cover. A high degree of security is essential on long-term projects. The main aid to progress in maximising the value of the insurance world is good communication. This is particularly necessary in view of the large number of disciplines and interests involved in major space projects. As in other disciplines, early consultation is of prime importance in the largest projects. The primary concern of the insurance world is risk and it appears, to those outside it, to be able simply to absorb risk by mysterious processes into which few people are interested to enquire — why should they — if you buy a car or a cigarette lighter, you don't take much interest in the problems of design and manufacture of these articles. At first sight therefore in those areas of human activity where risk and uncertainty appear to be very high, the insurance industry is naturally regarded as the one which can provide most help by reducing the uncertainties and, in effect, making the position more secure. The fact is that insuring the unique and the speculative, as such, is extremely difficult because insurance consists, like other professions, of the application of definite techniques. Like all techniques these have their limits. In order to understand what the insurance world can and cannot do to aid the development of energy from space, it is necessary to understand something about the basis of insurance techniques. Most people are aware of the fact that insurance underwriting, whatever the commercial adaptations of the day, has to be based on the statistics produced by experience of a reasonably large number of activities or events which are similar, if not identical. Insurance institutions who disregard this rule with respect to the risks they bear eventually become insolvent to the anger of their policyholders and the dismay of governments. Projects such as those arising from the search for energy from space require long-term support and need to derive what security they can from institutions who are not only prepared to make a promise with the future but who also have the wisdom and stability to fulfill that promise. Such institutions as these will of course exercise their imagination and ingenuity to meet the problems of the present as well as the future but I am sure I do not need to labour the point, particularly to the many scientists here, when I say that you do not make progress by deciding to ignore fundamental scientific law. How then can insurance help? First by analysing the project in some detail and separating out the events or activities which are similar, or even identical, to many
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