With the global space industry estimated at US$335bn in 2015, the World Space Risk Forum 2016 (WSRF) had the gargantuan task of providing insight on risk, investment, education and the future of this immense field. Vision spoke to space risk management expert Laurent Lemaire about the event and the UAE’s own space ambitions
Following the recent news that Dubai will become the ninth nation on the planet with a mission to explore Mars, The World Space Risk Forum (WSRF 2016) took place in the city from 2-4 November. Nearly 400 satellite operators, manufacturers, launch providers, space agencies, risk managers, insurance brokers, underwriters, lawyers, and capital providers convened under the theme ‘Unlocking Business in Space’.
Since the establishment of the Mohammed Bin Rashid Space Centre (MBRSC) a decade ago, Dubai space innovation has gone from strength to strength. The city’s first two satellites, DubaiSat-1 and DubaiSat-2 were developed in collaboration South Korea, and were deemed a huge success. WSRF 2016 comes before the launch of KhalifaSat, the first satellite mission to be developed entirely in the UAE, as well as the groundbreaking Emirates Mars Mission.
The MBRSC’s strategic partnership with WSRF 2016 made way for fascinating events and in-depth discussions about risk, investment, education, and the future of space, all from industry experts. Vision spoke to Laurent Lemaire, CEO of elesco, one of the world’s leading risk management and insurance underwriting specialists for the space sector. He offers his own take on WSRF 2016, and the future of business in space.
With space changing so rapidly, it is essential that risk is handled the right way. And not just from an insurance perspective but technical, financial and regulatory elements are equally important
Vision: What is space risk management, and what does elesco do?
Laurent Lemaire: Space insurance has been around since 1965, but it took off in the eighties. There was a switch from government-backed space ventures to private-backed space ventures, and insurance became relevant, because private investors needed backing in case something went wrong. They were ready to take business risks, but not technology risks.
Our job is to analyse those risks and to try to quantify them. If the underlying asset that shareholders base their business on – which is a satellite – doesn’t come off the ground, or crashes, or fails in orbit, they will want that risk to be taken by a third party. And that’s where we come in. We look at all the launches and we assign a price per launcher. Then we look at how many losses we’ve got on average, and build models based on those trends.
Q: Presumably much of this work is very sensitive. How can you assess risk if you don’t have access to information?
A: We can’t access the satellites themselves when they are in orbit, but we can get data from them. For each satellite we insure, we probably have a 100-150-page report with all its technicalities. The information we receive is protected by very strong agreements – legal and state agreements – but it is still not sufficient to disrupt the market. It’s a fine balance that has developed over the years.
Q: Why Dubai?
A: We created Else [Else is the parent company of elesco] in 2006, and wanted to do things differently. All of our competitors were mainly in the US and in Europe, and we wanted to create something that was closer to Asia, but not completely disconnected from Europe and the US. Dubai seemed like a good place to trade.
Q: What changes have you seen in the last year?
A: There’s a big push for privatisation in space right now, especially in the US. A lot of companies, entrepreneurs and billionaires are investing into space, and see it as the next adventure. You’ve also got governments doing the same thing. In China and Europe, for example, governments invest in it as they see it as strategic positioning for the future.
Q: As an industry observer, what are your thoughts on the UAE’s ambitions for its Mars mission and KhalifaSat?
A: We started the company in 2006, the same year as EIAST – which is now known as the Mohammed Bin Rashid Space Centre – with a very small base in our respective markets. Ten years down the line, what they’ve done is quite remarkable.
We insured 100 per cent of DubaiSat-1, we insured 50 per cent of DubaiSat-2, and if they need any insurance we will try to do something for DubaiSat-3. We’ve always been very close to them because they are quite exceptional, and refreshing in the space world. They’ve decided to work with young Emiratis, to train them, and to promote entrepreneurship. They’ve played their cards very skilfully and are doing an amazing job.
In the space field, you’ve got a lot of very strong companies everywhere, but because they’ve been established for a quite a while, you haven’t got that many young people with a good understanding of space. Because the Mohammed Bin Rashid Space Centre started from scratch, they have really engaged the youth. They built up a team of people who have been working on every aspect of the satellite, and they’ve grown with it. I think if you want to build an industry for the future, that’s exactly how you should start it. They started it with little money and a lot of hard work, and have achieved amazing feats in a short space of time.