When risk outgrows insurance

Amanda Eulenkamp from Business Brief interviews the Price Forbes Financial Institutions Team

As real estate structures evolve, fund managers need insurance programmes designed for today's realities.

The real estate investment landscape has changed significantly over the past decade. Regulatory scrutiny has increased, ownership structures have become more complex and many fund managers have taken greater direct responsibility for the assets they oversee. Yet insurance programmes have not always kept pace.

For fund managers in Guernsey and Jersey, that raises an important question: does your insurance programme reflect the risks your business faces today?

Following Grenfell, the Building Safety Act and growing investor expectations around governance, many managers are re-evaluating how risk is managed across their structures. Responsibilities once routinely outsourced are increasingly being brought in-house, while assets are often spread across multiple jurisdictions and held through layers of entities and special purpose vehicles.

Price Forbes has developed a specialist insurance solution designed to address these challenges.

Amanda Eulenkamp from Business Brief spoke recently with Gareth Abbott, Managing Director for FI & D&O, and members of his team, Rush Amaratunga, Executive Director and Zoe Woods, Director, about the changing risk landscape facing real estate investment managers and what fund managers should be considering when reviewing their insurance arrangements.

 

How has the risk landscape changed for real estate investment managers in recent years?

Gareth: The biggest change has been accountability.

Historically, many investment managers outsourced property management and development activities. Those responsibilities often sat with third-party providers, allowing fund managers to focus on investment performance and asset strategy.

What we've seen since Grenfell is a much greater focus on oversight and governance. The assumption that risk can simply be outsourced no longer holds true. Even where services are delegated, responsibility often remains with the asset owner or investment manager.

As a result, many firms have brought property management and development activities back in-house. They want greater visibility, greater control and a clearer understanding of what's happening within their portfolios.

The challenge is that insurance hasn't always evolved in line with that shift.

 

Why does that create a challenge from an insurance perspective?

Rush: Because the way many fund managers operate today doesn't fit neatly into traditional insurance categories.

Historically, insurance markets treated financial institutions risks and commercial property risks as separate disciplines. You'd have one set of policies dealing with fund management exposures and another covering property-related activities.

The reality is that many investment managers now sit somewhere between those two worlds.

They may manage funds, oversee development projects, supervise property managers and retain responsibility for building safety, all within the same structure.

When risks overlap, multiple insurance policies can create uncertainty. The last thing a client wants during a claim is a debate between different insurers about who is responsible for responding. That's where we saw an opportunity to create a more joined-up solution.

 

What gap did you identify in the market?

Zoe: Fragmentation was the biggest issue.

Many real estate investment managers had separate policies covering directors' and officers' liability, professional indemnity, employment practices liability, property management exposures and development activities.

Each policy served a purpose, but there wasn't always continuity between them.

If a claim involved multiple aspects of the business, there was the potential for delays, uncertainty and disputes regarding which policy should respond.

We believed there was a better way.

By combining these exposures within a single structure, clients benefit from a much clearer claims process, broader continuity of cover and a significantly more streamlined insurance programme. In some cases, there are also meaningful cost efficiencies. One client achieved savings of approximately GBP600,000 by consolidating multiple insurance programmes into a single solution.

 

 

Why is this particularly relevant for fund managers in Guernsey and Jersey?

Gareth: Because Channel Islands fund structures are often international by nature.

It's common for a fund to be domiciled in Guernsey or Jersey while holding assets across the UK and Europe through multiple entities and special purpose vehicles.

Our view is that insurance should reflect how those structures are owned, managed and governed, rather than relying on a collection of disconnected policies. When you understand how the business operates, you can build a more effective and responsive insurance programme.

 

How does your approach accommodate international portfolios?

Zoe: Flexibility is central to the product.

Funds evolve. New assets are acquired, new entities are incorporated and investment strategies change over time.

The policy has been designed with that in mind. It can provide worldwide coverage and automatically accommodate many changes within a client's structure, subject to agreed parameters.

That means clients don't have to worry that their insurance programme will become obsolete every time their business evolves.

For investment managers, particularly those operating internationally, that's incredibly valuable.

 

Grenfell is often referenced as a turning point. What lessons did the industry learn?

Gareth: Grenfell reinforced the importance of visibility and control.

Many organisations reassessed how they manage assets, developments and building safety obligations, with some bringing functions back in-house to strengthen oversight.

What's particularly interesting is that the benefits often extend beyond risk management. Clients frequently report stronger operational outcomes, better-maintained assets and improved tenant satisfaction, which can contribute positively to long-term asset performance.

 

How significant has regulation been in driving change?

Rush: Very significant.

Post-Grenfell legislation, including the Building Safety Act, introduced additional responsibilities and increased scrutiny for organisations involved in managing real estate assets.

Clients understandably wanted clarity around where liability sits and whether their insurance would respond if regulators became involved.

That's become an increasingly important discussion.

Today, insurance isn't simply about protecting against third-party claims. It's also about understanding how policies respond to investigations, defence costs and other regulatory exposures that businesses face in modern operating environments.

 

Is this type of insurance only relevant for larger fund managers?

Zoe: Not at all.

Specialist solutions aren't reserved for large institutions. We work with businesses at every stage of their growth journey.

In many cases, establishing the right insurance framework early can support future growth and ensure protection keeps pace with the organisation as it evolves.

 

In an increasingly digital world, why does the broker relationship still matter?

Gareth: Because insurance is ultimately a people business. Technology has undoubtedly improved efficiency, but complex risks still require expertise, judgement and advocacy.

One thing we're passionate about at Price Forbes is ensuring the people who manage client relationships are also deeply involved in placing the risk with insurers.

We don't believe clients should have to explain their business multiple times to different teams.

The individual negotiating with insurers should understand the client inside and out. That leads to stronger representation, better market engagement and ultimately better outcomes.

 

What do clients value most once they've experienced that approach?

Rush: Trust. Nobody wakes up excited to discuss insurance. What clients really want is confidence.

They want to know that the programme works, that somebody understands their business and that there is a trusted adviser helping them navigate what can be a very complex area.

A huge part of our role is education. We help clients understand their risks, explain how policies respond and identify potential gaps before they become problems.

That trust becomes particularly valuable when the unexpected happens.

 

What challenges are you currently seeing in the market?

Rush: One challenge is that the market is relatively competitive at the moment, which means some organisations feel comfortable with existing arrangements.

The danger is assuming that because a programme is competitively priced, it's necessarily providing the right protection.

We encourage clients to look beyond cost and consider whether coverage genuinely reflects their evolving business model.

 

Looking ahead, what trends do you expect to shape the market?

Gareth: Greater complexity.

We're seeing more joint ventures, increasingly sophisticated ownership structures and heightened regulatory scrutiny.

At the same time, investment managers are becoming more involved in the operation of the assets they own. As a result, insurance arrangements need to be adaptable and regularly reviewed rather than treated as a one-off exercise.

The days of putting insurance in place and forgetting about it are long gone.

 

Finally, why should Channel Islands fund managers speak to Price Forbes?

Gareth: Because our role is much more than placing policies.

We help clients understand risk, challenge assumptions and build insurance programmes that support their long-term objectives.

Real estate has changed dramatically over the past decade. We believe insurance should change with it.

Ultimately, we're here to make sure clients have confidence that when they need their insurance most, it responds exactly as intended.

As we often say, the most expensive insurance policy in the world is the one that doesn't pay. And that's why everything starts with understanding the client's business before we ever talk about cover.