It was word of mouth that led to the incorporation of the latest Bermuda insurer aimed at providing solutions for the rapidly developing space economy.

Space engineers and insurance executives anticipated thousands of small launches, and foresaw the need for a solid insurance infrastructure that did not already exist.

Orbway Underwriting Ltd, the new Bermuda specialty managing general agent, is targeting the underserved market of smaller launches, Low Earth Orbit (Leo) constellations and related launch activities.

It is the driving demand for Leo constellation architectures and increased commercial launch traffic that is expected to push the global space insurance market to nearly $4.5 billion in 2026.

Well capitalised for traditional risks, the industry faces challenges in high-density Leo regions.

The group of executives involved in the development of Orbway, the London parent, chose to offer a parametric insurance product because of the difficulties other companies have had in offering traditional insurance.

Alessandro Santoni, founder and CEO said: “I have a friend who is founder of an insurance company, an insurtech start-up.

“He started off in Bermuda and he would always tell me how much he loved developing this start-up in Bermuda because the regulator was really open, was really helpful, was guiding them along as they were building something new.”

Mr Santoni added: “He was telling me that the decision to build this with the BMA was the best choice for him. And so I said let’s go for it.”

His business is insurance for smaller projects, with assets that may be worth a few million dollars. He said that is why parametric insurance makes more sense.

Mr Santoni said: “We really think that parametric insurance is one of the best ways to do insurance in space, because if you think about it, it’s not a place where you can go and assess the damage once an incident happens.”

In addition, Orbway feels it will be able to bring the costs down for insureds and build out a Bermuda office by next year, pending business growth.

“We think we have a unique selling proposition,” he said, “because we are going to automate underwriting as well as (the claims) payout, which in turn will make policies cheaper for end users.”