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Pierro's Price Tag, No Guarantee
12th October 2012
PIERRO PRICE TAG NO GUARANTEE
The Sportsman - Friday 12th Oct 2012
ON TOP of the circa $30 million price tag, whoever wins the race to secure Pierro for stud duties will need to find another $3 million to insure the colt.
Pierro's forecast first-year premium equates to about 10 percent of his value and while it could drop down to $1 million in his second year, the outgoings are significant.
For instance, if Pierro stood his first year at $66,000, he will ostensibly be covering 50 mares just to cover the insurance.
It's a huge premium to pay, but the risk in not insuring the colt is a much bigger one according Australia's leading bloodstock insurance broker Richard Logan.
Pierro's new owners (when they finally emerge) are likely to sign a policy that protects them from mortality (death cover), theft, total and permanent infertility as well as partial congenital infertility - deemed to be under sixty percent.
''If he dies or he gets stolen or is sub fertile, below sixty percent, then they get their $30 million back,'' Logan said.
Logan says that whatever is the final price paid to Pierro's current owners, it will supercede Golden Slipper hero Sebring who was sold for a reported $28 million in 2009.
''A $30 million policy would be the biggest congenital infertility policy ever (written) in Australia and one of the biggest in the world,'' Logan told Sportsman.
''We (Logan Livestock) would spread it out amongst a variety of insurers. It would pretty much fill the whole market up with all the insurers around the world. This is a massive deal.''
''I can tell you that every year there are infertile first season horses, I just can't tell you if it is going to be the $5000 stallion or the $30 million stallion, all I can tell you is that there are one or two sometimes three a year in Australia.''
One of the more high profile cases in recent years was Starspangledbanner whose low fertility rating last season brought a swift and sudden halt to what could have been a glorious stud career.
Bought for somewhere in the vicinity of $8 million, Starspangledbanner is a stark reminder as to why these premiums on 'freshman' are so large, Logan says, it's a high risk scenario - for both sides.
''They do all the testing but it's a congenital thing,'' he explained.'' A horse can pass every test and be infertile or it can fail every test and be fertile, there is still a lot up in the air.''
Clearly whoever buys Pierro will hope to never need to enact any future policy, but they'll have 30 million reasons to be glad they had one, so long as the can find another three.
Sportsman Vol 17 No 3