The Birth of Charter Space: A Solution to Space Insurance Challenges
When Yuk Chi Chan embarked on the journey to establish Charter Space in late 2021, he was fueled by a personal history of frustration and inefficiency. As a mission manager at a satellite bus startup, Chan faced the daunting task of coordinating the company’s inaugural demonstration mission. The challenge? Critical data was scattered across various Microsoft Excel sheets, making it nearly impossible to maintain a cohesive understanding of the project.
The Frustration of Fragmented Data
In his role, Chan not only managed internal engineering operations but also had to repackage the same essential engineering and program data for different external audiences. “It was all the same data. It was all about the same physical object,” he recounted in an interview with TechCrunch. This realization sparked a pivotal question in his mind: “Why shouldn’t I be able to have some sort of unified interface, or some sort of unified data model, that actually represents this thing correctly to whoever’s looking at it?”
The Vision Behind Charter Space
This frustration led to the inception of Charter Space. Chan envisioned a platform that transcended being merely a development tool for aerospace engineers. Instead, he described it as a fintech company for space. The software captures manufacturing and test data directly from the source, feeding into an underwriting interface that connects with the six largest insurance carriers in the market. The goal? To streamline risk evaluation for spacecraft insurance, making it faster, cheaper, and more reliable.
Tackling the Underwriting Challenge
One of the most significant hurdles Chan and his team faced was developing a robust underwriting model. “The biggest technical risk that we’ve had to derisk is really starting to develop that underwriting model,” he explained. Understanding which factors matter most and how they should be weighted is crucial for layering risk analytics on top of the captured data.
Small satellites, for instance, often fail within the first 90 days in orbit due to internal technical faults—a pattern that Charter aims to analyze and price effectively.
The State of Spacecraft Insurance
Spacecraft insurance is a rarity in the industry. Out of approximately 13,000 satellites currently in orbit, fewer than 300 are insured. Unlike traditional insurance products, the challenges here are not rooted in fraud or misaligned incentives but rather in the high costs associated with underwriting. Operators typically compile extensive technical documentation, submit it to brokers, and then endure a lengthy waiting period as underwriters assess the risk. Chan noted that premiums can soar, with quotes reaching up to 80%.
Aiming for Efficiency
Charter Space seeks to revolutionize this process by providing a comprehensive view of all technical details, allowing underwriters to assess risks more efficiently. By reducing the time spent on evaluations, Charter hopes to increase the number of insurable assets, thereby pooling more risk and fostering a healthier market overall.
“We want more satellites to get insured,” Chan emphasized. “That means that everything as a whole is much, much safer.” The proliferation of insurance coverage not only benefits the space industrial base but also encourages global investment from diverse capital sources, moving beyond reliance on venture capital and public markets.
Tools for Diverse Needs
Charter’s platform is already operational, serving both companies and universities. Additionally, it offers a lighter product for customers who are primarily interested in the insurance benefits rather than the full suite of engineering management features.
Strategic Acquisitions and Future Goals
At TechCrunch Disrupt, Charter announced its acquisition of Plover Parametrics, a Y Combinator-backed insurtech that initially focused on climate parametric products. This strategic move will enable Charter to provide a “white glove” service by placing policies directly, eliminating the need for intermediaries.
The broader vision is to unlock cheaper capital sources for space companies. By standardizing underwriting processes, Charter aims to pave the way for more financing options, inviting banks and lenders into the fold. “We need to bring in the banks, we need to bring in lenders, because that’s a much more efficient capital source,” Chan stated.
Join the Conversation
For those interested in learning more about Charter Space and its innovative approach to the challenges of spacecraft insurance, the opportunity awaits at TechCrunch Disrupt. Attendees can explore dozens of startups, hear pitches, and engage with guest speakers across multiple stages.