A Systemic Risk Without a Playbook
Space-related catastrophes present an almost existential risk to the global insurance ecosystem. A single impact on a populated region could generate insured losses rivaling or exceeding the costliest disasters in history. Reinsurers, who pool global risk, could be overwhelmed, leaving primary insurers insolvent. The ripple effects could paralyze credit markets, real estate, and entire industries dependent on insurance coverage to operate.
The unsettling truth is that no public playbook exists for how claims would be processed in such a scenario. Would governments step in with emergency backstops? Would insurers invoke exclusions en masse? Would international bodies such as the United Nations or World Bank intervene? The lack of clarity feeds the perception that insurers are avoiding the issue altogether.
What’s Next
Astronomers will soon regain line-of-sight to 3I/ATLAS, and the data collected will sharpen our understanding of this interstellar visitor. For insurers, the timeline is less forgiving. Risk modeling must resume now, before the next unexpected asteroid skims past Earth or a comet brightens ominously in the night sky.
The procedural roadmap is straightforward: insurers must disclose their risk modeling practices, update underwriting language to address space events explicitly, and develop contingency plans for claim processing in catastrophic scenarios. Regulators could compel such disclosures, just as climate risk reporting is increasingly mandated. Failure to do so risks not only financial ruin but also accusations of willful neglect of duty.
