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Geopolitical competition is driving growth and risk in the global space economy

Today, space infrastructure underpins the essential functions of modern society: secure communications, intelligence gathering, navigation systems, and the logistics networks that keep the global economy moving.

The growth of the global space industry shows no signs of slowing down. What was once the domain of exploration and scientific discovery has evolved into a critical arena for national security and economic strategy worldwide. Today, space infrastructure underpins the essential functions of modern society: secure communications, intelligence gathering, navigation systems, and the logistics networks that keep the global economy moving.

With defence budgets soaring and innovative public-private partnerships reshaping the landscape, the opportunities in space are vast. The drive for enhanced space capabilities is often about sovereignty — nations seeking independence from the geopolitical uncertainties and domestic agendas of others. As some countries seek to reduce their reliance on US-based systems, defence funding is being drawn from other defence areas to develop indigenous space capabilities.

However, with unprecedented opportunities come unprecedented risks. As technological advancements transform science fiction into operational reality, sophisticated insurance solutions have come to be viewed as mission-critical. Protecting these high-stakes investments is essential for navigating the complexities of the new space age.

A new era of strategic space investment

Space is now a cornerstone of modern defence architecture and economic stability. The numbers tell a compelling story: the US Space Force’s 2026 budget is projected to increase by up to 40%, reflecting Washington’s commitment to space-based defence capabilities. One prominent example is the “Golden Dome” missile shield, a proposed network of space-based sensors and satellites with an estimated cost of US$175 billion.

Similarly, NATO countries are targeting 5% of GDP for defence spending by 2035 — more than doubling the current target of 2% — with space projects receiving strategic priority. Germany’s commitment alone is staggering: €35 billion earmarked for space-related defence spending by 2030.

The economic implications extend beyond defence. According to the UK Space Agency, 20% of the UK’s GDP depends on satellite-enabled services, encompassing everything from financial transactions and navigation systems to emergency response capabilities. Space is not just the future — it is integral to our economic present.

The private sector revolution

The surge in public sector funding for space initiatives is complemented by a wave of private investment and public-private partnerships, transforming the space sector into a vibrant ecosystem of innovation. Governments are increasingly purchasing hardware and services from commercial providers, creating a collaborative environment that accelerates breakthroughs in satellite surveillance, space-based defence systems, and cybersecurity.

These partnerships can deliver tangible benefits: reduced costs, faster deployment cycles, and rapid technological innovation. NASA’s Commercial Crew Program demonstrated how collaboration lowered the costs of launching humans into space while fast-tracking efficiency, technological innovation, and operational readiness.

Navigating risks in an increasingly crowded orbital environment

By 2030, it’s estimated that between 60,000 to 100,000 active satellites will orbit Earth. While government (military and civil) space activity remains a significant source of demand, private companies such as SpaceX and Eutelsat’s OneWeb are disrupting traditional models, especially in internet communications and launch services.

Regulatory environments are evolving. In the US, streamlined approval processes for commercial rocket launches may benefit private space ventures, though questions remain about potential environmental oversight gaps. Meanwhile, the global race for domestic space capability intensifies, with approximately 80 national space agencies now competing to attract companies and investment — nearly double the number from a decade ago.

This acceleration can heighten risks. Counterspace threats, including physical attacks and cyberattacks, pose significant security challenges. The sheer volume of space activity increases collision risks, orbital congestion, and dangerous debris proliferation. Add the inherent technological complexity of space missions, where launch failures carry enormous security, operational, financial, and environmental consequences, and the risk landscape becomes very complex.

With such high stakes, effective risk management and mitigation strategies are no longer optional — they’re fundamental to promoting the safety, sustainability, and resilience of space assets, operations, and investments.

Managing and mitigating space risks with insurance

Space risk management has evolved from basic launch insurance to a suite of risk solutions. Today’s approach rests on a detailed understanding of risk allocation, sophisticated risk assessment and evaluation, programme design and implementation support, and experienced claims advocacy. Insurance coverage can now be available to address a range of potential risks, including launch failures, satellite malfunctions, orbital debris, collision risks, ground operations, and even classified assets.

The financial implications are substantial. A single satellite project can cost anywhere from tens of millions to over a billion dollars and require years of development before launch. Insurance solutions not only protect these massive investments, but can also better enable them. Indeed, many financial institutions mandate insurance coverage as a condition of providing project financing.

Specialised solutions are available for defence-focused space insurance, such as:

Classified technology and government contracts: While governments typically self-insure classified satellites and defence payloads, specialised policies with appropriate information-sharing restrictions are increasingly available for specific situations.
Dual-use systems: Many satellite communications companies serve both civilian and military applications, requiring tailored insurance products that address this complexity.
Defence-specific assets: As more defence capabilities are procured through commercial channels, specialised coverage through the space insurance market becomes both possible and essential.
Emerging sectors: In-orbit servicing, alternative GPS systems, in-space manufacturing, space habitats, and other breakthrough technologies all demand innovative insurance solutions to manage unprecedented risks.

Watch this space

The next giant leap in space will likely involve greater integration among public, private, civil, and military sectors. Organisations that take ownership of risk management and implement proactive resilience strategies will be best positioned to shoot for the stars, both now and into the future.

Marsh’s Space team understands the risks associated with traditional space, the new commercial opportunities, and the unique requirements of defence assets. As a leading provider of risk management services to the space industry, we collaborate with manufacturers, satellite operators, launch service providers, and transponder users to develop tailored insurance coverage and risk management solutions.

The space economy is expanding at a breakthrough pace. Are you prepared for the journey? Please reach out to your local Marsh representative for more information.

The surge in public sector funding for space[JR1] initiatives is complemented by a wave of private investment and public-private partnerships, transforming the space sector into a vibrant ecosystem of innovation. Governments are increasingly purchasing hardware and services from commercial providers, creating a collaborative environment that accelerates breakthroughs in satellite surveillance, space-based defence systems, and cybersecurity.

[JR1]Space initiatives or activities? Seems to need a noun following space.