When you think of captive solutions, you’ll probably bring to mind “uninsurable” or “difficult to place” cover. Or you might associate captive insurance with highly sophisticated and/or specialist risks. Perhaps you’ll be pondering the benefits of bespoke design for insurance and risk programmes.
When you think about medicinal cannabis, you may well visualize an emerging industry, breaking new pharmaceutical ground and grappling with perception. You might be aware, also, of the billions in investment that have already been pumped in globally and the exponential growth predictions which promise many billions more.
If you do, you’ll most likely see that the two are natural bedfellows.
It stands to reason that one of the biggest challenges for organisations involved with medicinal cannabis– a high-value, complex industry very much in its infancy – is effective risk management, and this is likely to remain the case for some time. The commercial insurance industry, already labouring under the hardest market in two decades, has not yet caught up.
Cue the captive solution.
The scientific underpin to the medicinal cannabis sector lends itself well to an assessment of appropriate levels of risk retention within a captive. Access to the highly-sophisticated re-insurance market and specialist underwriting resources through a captive are invaluable too.
Of course, underwriting becomes more effective when good governance is in play. And this is where the Isle of Man really demonstrates its credentials. Not only does it have a highly robust, long-standing regulatory framework for captive insurance but it has now developed a regulatory regime which will govern the cultivation, distribution and export of medicinal cannabis products too. The Island’s tight-knit business community is ideal for close collaboration between the insurance, scientific and commercial expertise required to optimize the effectiveness of the captive solution for medicinal cannabis businesses. The respective regulators can confer just as effectively too.
Captive insurance is already on the radar for the cannabis industry, indeed it featured prominently in the World Captive Forum earlier in 2021. A repeated theme when these conversations occur, is around the best jurisdiction in which to domicile the captive. Where better than one that has the business and regulatory acumen and credentials to meet the many challenges that exist on both sides of the commercial and risk management equation?
Find out more about the Isle of Man's captive insurance ecosystem and the types of captive insurance available on the Isle of Man.
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