When Pacific Indemnity's directors and officers (D&O) practice manager Adam Suplina (pictured) began developing the company's new management liability product, he did something that sounds straightforward but is probably rarer than it should be in specialty insurance: he asked brokers what was wrong with what they already had.
What came in conversations was not a wishlist, it was a list of quite specific grievances. Several themes emerged that cut to the heart of why management liability, despite its critical function in protecting directors and officers of Australian SMEs, had become a product brokers were struggling to sell with confidence.
"There were three themes that came out consistently over the last 18 months of developing these products and speaking to brokers," Suplina said.
The result is a new management liability policy underwritten by AXA XL, positioned as a direct answer to each of those three frustrations, targeting the Australian SME and mid-market commercial and financial lines segment.
The first and most urgent theme was claims. Not just claims handling in the broad sense but the specific anxiety brokers felt about whether their clients - directors facing personal liability in regulatory investigations - would get a fast, knowledgeable response when it mattered most.
"They wanted to make sure you had a claims-first approach and also that you had local, in-house claims ability - that was critical for them," said Suplina."Especially when dealing with directors personally liable in regulatory investigations and time-sensitive matters, they wanted to make sure you responded quickly."
The response Pacific Indemnity has built into the product is a 30-day promise on defence cost payments and in-house claims management. This is a direct counter to what brokers described as a market in which responsiveness had become inconsistent and outsourced. For directors facing a regulator's knock at the door, the difference between a 30-day payment and an open-ended claims process is not administrative. It can determine whether they can mount a defence at all.
The second frustration brokers raised was policy currency. As the risk landscape facing SME directors shifted - cyber-related management liability claims, social engineering, privacy exposures and COVID-era governance pressures - many existing policies had not kept pace.
"There were emerging threats that some policies weren't keeping up with and brokers wanted to make sure the policy was keeping up with those exposures: Cyber-related management liability claims, social engineering claims, privacy areas, COVID," Suplina said.
The third theme was the one that might surprise those outside the broking community but will resonate immediately with anyone who has sat with an SME client trying to get management liability cover placed.
"The last one was the absolute frustration of filling out copious amounts of paperwork to get cover - filling out proposal forms, which is a traditional way of gathering information - and asking questions that some brokers believe may not be relevant for their clients," Suplina said.
Pacific Indemnity's answer is an online portal built to ask only questions that matter for the risk in front of the broker - stripping out the noise that has historically made management liability feel cumbersome for clients who are often first-time buyers. "Trying to remove the burden of complexity to get a quote in a market where buyers are sometimes new and don't want those fictional hindrances to buying cover," he said.
That last point carries a market development argument that goes beyond Pacific Indemnity's own book. Management liability penetration among Australian SMEs remains stubbornly low relative to the actual exposure those businesses carry. If friction in the buying process is suppressing demand - and broker feedback strongly suggests it is - then simplifying access is not just a competitive play. It is an argument for growing the category itself.
Pacific Indemnity is betting that a market built around broker pain points, rather than underwriter convenience, is the stronger long-term position. Eighteen months of broker conversations during product development suggests they have identified the right pain points. Whether the product delivers on each of them is a question claims experience will answer.
