Emerging Risk Markets: From Cannabis Farms to Space Tourists

Insurance has always evolved alongside society — from insuring ships and factories to satellites and digital wallets. But today’s emerging markets move faster than regulators, risk models, and traditional insurance frameworks can keep up with. Unlike embedded insurance, which introduced new distribution models, emerging markets force insurers to confront entirely new categories of risk — often before a single actuarial model exists.

History shows us how this begins. When the first satellites launched in the 1960s, only their journey into space was insured. Ongoing coverage was rare, and even today only around 5% of satellites in orbit are insured long-term. The reason is simple: unknown risk creates uncertainty, and uncertainty is expensive. That same foundational issue now defines modern emerging sectors — crypto, space tourism, biotech, psychedelics, and even the creator economy.

Consider cannabis — once one of the most significant growth areas in the E&S market. It sits in an unusual regulatory purgatory: legal at the state level in places like California and Colorado, yet still federally prohibited in the U.S. The result? Insurers face questions no law textbook has ever answered:
Can cannabis legally be transported across state lines? Does a greenhouse of high-value plants need crop coverage plus burglary coverage plus liability if teenagers climb the fence? Standard agricultural policies don’t account for risk profiles like these. In many cases, specialty carriers were the only ones willing to step in — a theme we see repeated in crypto.

Crypto and Web3 compound the challenge. Exchanges are systemically important but lack the guardrails of traditional finance — no FDIC backstops, no historical loss curves, no clear legal precedents. A lost private key, a rogue employee, or a major hack could wipe out user assets instantly. Individual holders now buy personal-level coverage for wallets, and niche carriers like Relm, Evertas, and CoinCover emerged to fill the gap. But underpinning it all is one truth: you cannot insure what you cannot define — and crypto risk is constantly rewriting itself.

Biotech brings its own frontier. Psychedelic-assisted therapy is gaining medical traction, with ketamine already used in clinical settings and MDMA/psilocybin close behind. Gene-editing technologies like CRISPR promise revolutionary health breakthroughs, yet health insurers still exclude gene therapy in many policies because the long-term effects remain unknown. This gap between scientific possibility and actuarial certainty forces insurers into philosophical territory: at what point does innovation outweigh insurability?

Even cultural shifts generate risk markets. The creator economy, where a YouTuber can earn $40 million from ad revenue alone, brings production insurance, IP disputes, defamation liability, and personal brand risk into mainstream discussion. One viral mistake or unauthorized content clip can trigger litigation. Creators operate like media companies — yet many don’t have the protections that media companies do.

The emerging risk story culminates somewhere unexpected: space tourism. Wealthy thrill-seekers traveling on Blue Origin flights sign NASA-style liability waivers, even though those waivers have never been tested in court. If something goes wrong 90 km above sea level, who pays — the manufacturer, the operator, the tourist, or an insurer who has never priced such a claim? One catastrophic incident could end the industry overnight, not because rockets fail, but because insurance economics do.

Across cannabis farms, crypto vaults, biotech labs, and influencer studios, one constant remains: precedent is the foundation of insurance, and emerging markets don’t have it yet. Until courts rule, claims settle, and losses accumulate, insurers are forced to price imagination — not data.

Still, every now-established line of business began as an emerging one. Cars, satellites, aviation, renewable energy — all uninsurable once. The future may belong to carriers willing to experiment, model unpredictability, and build first-mover expertise. As one conversation in the episode hinted, perhaps the industry’s next frontier isn’t claims-based or parametric coverage — but predictive insurance, where probabilistic scenarios fill the gap until reality catches up.

Whether it's gene-editing therapy or a TikTok star’s lawsuit, one thing is clear:
today’s uncertainty is tomorrow’s market — once someone is willing to insure the first loss.

Listen to the full conversation on the Coverage & Coffee Podcast to dive deeper into how insurers are navigating the unpredictable future.