INVESTMENT MANAGEMENT INSURANCE CASE STUDY
Boutique Global Equities Fund Manager, PI and D&O Placed After Three Declines, Cyber Added, Program Held at Renewal
A small boutique fund manager wanted PI, D&O and cyber. Three financial lines markets declined the occupation outright. One quoted the combined cover; a year later the renewal market was thinner still.
THE SITUATION
A boutique investment manager providing global listed equity portfolio management to wholesale clients through separately managed accounts approached Tank Insurance for professional indemnity, directors and officers and cyber cover. The business had a small team and modest funds under management in global listed equities, with no crypto exposure.
OUR APPROACH
- PI and D&O went to the financial lines markets that consider investment management. Three declined on occupation. One quoted PI only at around $18,700. One quoted combined PI and D&O at approximately $10,700, with the NSW small business insurance duty exemption applied on the client's declaration.
- Cyber was placed separately. One market declined on the limit requested. Two quoted: approximately $6,000 with jurisdiction limited to Australia but worldwide territory, and around $10,900. The client took the first after its payment controls were documented on the proposal.
- At renewal the market was tested again. Two markets declined, one citing US exposure, one indicated a $20,000 minimum, one indicated $20,000 to $25,000, two referred, and one quoted around $13,000. The client's North American income was clarified as less than a quarter and split between funds under management and consulting. The program renewed with the incumbent.
THE CHALLENGES
Three markets declined this occupation before assessing the business. The submission had to reach the markets that do, with the SMA structure, the wholesale client base and the absence of a unit trust explained up front.
The renewal showed how thin that market is. Seven markets were approached and only one offered a competitive alternative, which made the incumbent's renewal the right outcome for that year.
THE OUTCOME
Combined PI and D&O was placed with Dual at approximately $10,700 in year one, and cyber with Brooklyn at approximately $6,000. At renewal the PI and D&O program was held with the incumbent after seven markets were tested.
Final Solution: A three-policy program for a boutique fund manager, PI and D&O at around $10,700 and cyber at around $6,000, renewed with the market tested each year.
This case records one historical outcome; current insurer appetite, premium, timing and terms depend on the complete risk at the time of application.
For the wider buying context, see our investment management insurance guide, the management liability page and the cyber insurance page.
FUND MANAGER QUESTIONS
What this placement answers for other boutique investment managers
Why do insurers decline fund managers for PI?
Does US client exposure affect a fund manager's PI?
What do cyber underwriters ask a small fund manager?
INVESTMENT MANAGEMENT INSURANCE
Put this placement in context
Case-study results are historical and are not a promise of current pricing, capacity or policy terms. This page is general information only and does not take account of your objectives, financial situation or needs.
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