The sun is high, the sky is blue. What could possibly go wrong?

The commercial space sector has always been characterized by its fragility. It’s a multibillion-dollar annual business now and may see a new burst of growth as Earth observation takes a seat at the table with telecommunications.

Still, one gets the feeling it’s a beautiful car racing towards a bright future on a road that’s never far from the cliff edge.

The industry isn’t big enough to assure regular coverage by equity analysts with enough experience to distinguish among risks and to put into perspective the inevitable failures. That leads to stock gyrations out of sync with underlying business assessment.

insurance-costHow many satellite telecommunications companies are sweating bullets as they face months of in-service delays from the bottleneck in commercial launch services?

What would happen to satellite startups, whatever their business models, if one large satellite constellation were to default on its loans or otherwise fail?

How much have the two biggest satellite export-credit agencies, the U.S. Export-Import Bank and France’s Coface, tightened terms for satellite companies following the bankruptcy of Australia’s NewSat?

Viewed within these agencies’ total loan portfolios, NewSat was peanuts. But both, for different reasons — politics in the United States, and overexposure to risk in France — are said to be less friendly to satellite applications.

Just as it’s always darkest just before dawn, so shadows lengthen just after the sun reaches its highest elevation angle.

That brings us to the insurance market, which in recent years has put on a happy face for the space sector.

In a time of low interest rates, insurers are looking high and low for return on their investment. Underwriters never before present in space are now vying for business from operators such as SES, Intelsat, Eutelsat and Inmarsat, which can be counted on to perform their own in-depth risk analysis.

Despite a not-so-good 2015, space underwriting has been profitable over the past decade. Premium income has exceeded claims volume. Now, no underwriter intending to remain in the business can turn its back when SES asks for a single, multi-launch policy, on peril of being left out of the next policy.

Insuring the launch and first year in orbit of a satellite launched by Arianespace or SpaceX can now be had for 5 percent of the insured value, compared to 10-15 percent previously. Customers of Russia’s Proton pay a higher rate because of that vehicle’s recent track record.

After the first year of service, operators typically purchase annual in-orbit insurance, which used to cost 2.5 percent a year. Now it’s 0.5 percent.

The collapse in rates doesn’t mean increased underwriting business. Even with these low rates, some fleet operators don’t insure their launches unless required by debt covenants. Others insure only the launch and the first year.

As of early October, this year looks relatively good for space insurers. It’s not them, but their cargo and marine market cousins, who are stuck with the bill for the pre-launch issues on Japan’s Superbird-8/DSN-1, damaged in transit to its spaceport; and Amos-6, destroyed during preparation for SpaceX’s static-fire test.

But with SpaceX down for a few months, the volume of premiums in 2016 may touch historic lows. As of September, premiums totaled $450 million — about the amount that the Intelsat 33e carried for its launch.

When a single satellite is insured for the equivalent of a full year’s premium volume for the space insurance industry, you might call that a fragile market.