QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.3.2

FORM OF AMENDMENT NUMBER ONE TO INVESTMENT MANAGEMENT
AGREEMENT

        This AMENDMENT NUMBER ONE dated as of [        ] to the Investment
Management Agreement ("Agreement") dated as of November 14, 2006, originally
made by and among Prospector Partners, LLC, a Delaware limited liability company
(the "Adviser"), and OneBeacon Insurance Group, Ltd, a Bermuda corporation ("the
Client"). Per the terms of the Agreement, the Adviser has agreed to act as
discretionary adviser with respect to the specified assets of the investment
management clients of the Client identified on Schedule A to the Agreement.
Capitalized terms used but not defined herein have the meaning set forth in the
Agreement.

WITNESSETH

        WHEREAS, the Adviser and Client are parties ("Parties") to the
Agreement; and

        WHEREAS, pursuant to the terms of paragraph 17 of the Agreement, the
Parties may amend the Agreement in writing; and

        WHEREAS, the Adviser and the Client desire to amend the Agreement to
modify certain terms to the Agreement, including (i) the confidential
relationship paragraph and (ii)certain clients of the client identified in
Schedule A and Schedule D to the Agreement.

        NOW, THEREFORE, the Parties agree as follows:

        (i) Paragraph 9—Confidential Relationship of the agreement shall be
deleted in its entirety and replaced with the following:

        9.    Confidential Relationship.    

(a)The Parties hereby agree that all of the information provided to the Client
by the Advisor and to the Advisor by the Client shall be considered proprietary
and confidential in nature (hereinafter, the "Confidential Information") and, as
such, shall not be disclosed or revealed or caused to be disclosed or revealed,
in any manner, to any non-party to this Agreement, except:

(i)as may be required by law or any judicial, regulatory or self-regulatory
authority (including without limitation any required filing with the SEC or any
state insurance regulator), provided that notice of any such disclosure is at
the time sent to the other party, except that no notice will be required for
routine SEC or department of insurance filings or routine state department of
insurance financial or market conduct exams,

(ii)as the either party may consent to specifically in advance in writing;
provided, however, that

(iii)any such Confidential Information may be disclosed to each party's
officers, directors, employees, consultants, contractors, advisors, and
fiduciaries ("Representatives") who need to know such information in order to
carry out the purpose of the disclosure and so long as they agree to keep it
confidential;

(iv)"Confidential Information" does not include any information which (A) is or
subsequently becomes published or available to the public other than by breach
of this Agreement, (B) is received by receiving party from a non-party not in
breach of any obligation of confidentiality, (C) is independently developed by
receiving party,

1

--------------------------------------------------------------------------------

or (D) was in receiving party's possession or known to receiving party before
disclosing party disclosed it to receiving party except for Client's investments
subject to subsection (v) below; and

(v)Advisor Confidential Information does not include the identification of the
Client as a Client or a Client's investments as of a given point in time which
are required to be disclosed together with investments of Advisor's other
clients to comply with applicable federal securities laws (which is consistent
with (iv) (A) above).

(b)The Client agrees that:

(i)Adviser may disclose that the Client is a client of the Adviser and to the
inclusion of the Client on a list of representative clients of the Adviser or in
other marketing materials;

(ii)Adviser shall be permitted to retain copies of all documentation necessary
under the Advisers Act to support the track record or otherwise required to be
retained under the Advisers Act and related rules, but only for such period as
required to be retained under applicable federal securities laws; and

(iii)The Client shall not allow the Confidential Information to be used to
purchase, sell, trade or invest in any securities, instruments or other
investments owned by the Account without obtaining the prior written consent of
the Advisor, unless such consent is impossible or impractical due to an event of
force majeure that interferes with Advisor's performance under this Agreement;
and further acknowledges that:

(iv)The Advisor or its affiliates may be irrevocably damaged if the covenants
herein are not specifically enforced and, accordingly, the Client hereby further
agrees that, in addition to any other relief or remedies available to the
Advisor, the Advisor shall be entitled to seek an appropriate injunction or
other equitable remedy from a court with proper jurisdiction for the purposes of
restraining the Client from any actual or threatened breach of such covenant,
and no bond or security will be required in connection therewith. In any event,
the Client shall be responsible for any breach of this Agreement by any of the
Client's Representatives, and the Client agrees, at its sole expense, to take
all reasonable measures (including, without limitation, court proceedings) to
restrain its Representatives from prohibited or unauthorized disclosure or use
of the Confidential Information or any other breach of the terms of this
Agreement.

(c)Advisor agrees that:

(i)the Client shall be permitted to report the Investment Track Record (on a
stand-alone basis, as part of its total portfolio return or otherwise) with
respect to the Investment Account in any internal or external reports of it or
its affiliates; and

        (ii) Schedules A and D of the agreement shall be deleted in their
entirety and replaced with Schedules A and D attached to this amendment.

        The Agreement shall otherwise be unaffected by this Amendment and its
terms shall continue as set forth therein.

[SIGNATURE PAGE FOLLOWS]

2

--------------------------------------------------------------------------------

SCHEDULE A

SUBSIDIARIES OF ONEBEACON INSURANCE GROUP, LTD. SUBJECT TO THE
INVESTMENT MANAGEMENT AGREEMENT DATED NOVEMBER 14, 2006 AND
AMENDED OCTOBER 22, 2007

Fund American Companies, Inc.
The Employers' Fire Insurance Company
Homeland Insurance Company of New York
The Northern Assurance Company of America
OneBeacon America Insurance Company
OneBeacon Insurance Company
Pennsylvania General Insurance Company
Fund American Enterprises Holdings, Inc.
Fund American Financial Services, Inc.
OneBeacon Holdings (Luxembourg) S.a.r.l.
Mill Shares Holdings (Bermuda) Ltd

3

--------------------------------------------------------------------------------

SCHEDULE D

CLIENTS OF PROSPECTOR PARTNERS, LLC SUBJECT TO FEE SCHEDULE SET
FORTH IN SCHEDULE C

Fund American Companies, Inc.
The Employers' Fire Insurance Company
Homeland Insurance Company of New York
The Northern Assurance Company of America
OneBeacon America Insurance Company
OneBeacon Insurance Company
Pennsylvania General Insurance Company
OneBeacon Insurance Pension Plan
OneBeacon Insurance Savings Plan—Equity 401k
OneBeacon Insurance Savings Plan—Fully Managed
Fund American Enterprises Holdings, Inc.
Fund American Financial Services, Inc.
OneBeacon Holdings (Luxembourg) S.a.r.l.
Mill Shares Holdings (Bermuda) Ltd

4

--------------------------------------------------------------------------------

        IN WITNESS WHEREOF, the Parties hereto have executed this Amendment
Number ONE to the Agreement.

ADVISER:
PROSPECTOR PARTNERS, LLC   CLIENT:
ONEBEACON INSURANCEGROUP,
LTD.           Signed:  

--------------------------------------------------------------------------------

  Signed:  

--------------------------------------------------------------------------------

By:  

--------------------------------------------------------------------------------

  By: Paul M. McDonough

--------------------------------------------------------------------------------

Title:  

--------------------------------------------------------------------------------

  Title: Chief Financial Officer

--------------------------------------------------------------------------------

5

--------------------------------------------------------------------------------

QuickLinks

Exhibit 10.3.2