If you're an insurance company that finds house fires and fender-benders a little bit mundane, there's always the space business.

With premiums of, say, US$40 million a shot and payouts that can be ten times that, insuring commercial satellite launches is not for the faint-hearted.

Yet after a series of accidents that took these premiums to highs of as much as one-fifth of entire project costs, premiums slipped back last year (see graph).

“Insurers are in business to make a profit, so if you have a period when the business is profitable, others will come into the market,” explains Rick Hauck, former chief executive of AXA Space, a satellite insurer based in Bethesda, Maryland.

Premiums rose sharply after the solar panels failed on six Boeing 702 communications satellites in 2000 and 2001 — costing insurers some $1.5 billion. High premiums subsequently put a damper on commercial satellite launches, which were already suffering from the collapsing fortunes of the telecommunications industry.

But an assessment by the US Federal Aviation Administration, published last month, suggests that premiums are finally starting to dip again.

No one knows whether the fall will be sustained. “It is in the hands of events,” says Hauck. “If there are profits, others come in to compete and that puts pressure on the rates.”