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Trends and Hot Topics in Fine Art Insurance

The past few years have been quite tumultuous for nearly everyone on the planet. Between the COVID-19 pandemic, the war in Ukraine, the world seems to have turned on its head. The Fine Art space- and the insurance for the associated risks- haven’t been immune to global ebbs and flows. In our first iteration of “Trends and Hot Topics in Fine Art and Insurance”, we’ll be covering the recent string of vandalisms of artworks across the world, as well as how the increase in art sales have affected insurance capacity at high-end storage facilities with commentary and thought leadership from various fine arts and insurance professionals.


Vandalized Art – The Insurance Perspective

Fine Art has been celebrated for its beauty, provocation, and of course creativity. Beauty is expressed and easily portrayed in the world’s most famous work, Mona Lisa. The artists that frequented Café Guerbois in the late 19th Century and then started the Impressionist movement were provocateurs to French art and the Salon- as author Malcolm Gladwell puts it, David to Goliath. Their creativity led to their provocation in the art world, and forever changed the way humans view art. But is there such a thing as too much provocation affecting the Fine Art world?


The activist group, Just Stop Oil[1], has made quite a few headlines over the past year like the incidents with Vermeer’s ‘Girl With a Pearl Earring’[2] this past October and Monet’s ‘Les Meules’2 in the same month. Gabrielle Segal, who is the Founder of GS Art Concierge, provided us with her thoughts on the attacks, “The goal of Just Stop Oil's acts of vandalism is to draw attention to their cause, so the works most cherished by the public like Van Gogh's Sunflowers and Constable's The Hay Wain are natural targets--the taboo of desecrating an object central to the history of Western civilization and culture simply makes for a stronger headline. Of course, the attack on pieces containing nature-inspired subject matter like flowers and fields is symbolic in itself.”.


It's not Just Stop Oil though, as attacks on art stem from a variety of people and groups. Segal elaborates in more detail on the profile of these individuals and groups, “These acts have been perpetrated by the Left, the Right, and the simply crazy…we've also seen far-right groups in Denmark vandalizing an Asger Jorn exhibition[3] because of the late artist's left-leaning politics, and we've also seen a random individual attack Miriam Cahn's ‘f--- abstraction!’ at the Palais de Tokyo saying the painting ‘promotes pedophilia’ never mind that the artist's intention with the work was to denounce the Russian army's attacks on Ukrainian women and children.”


From an underwriter’s perspective, it’s critical to maintain a smart and sharp security staff, with personnel on premises as often as possible. Not only that, additional item-specific security is key- barriers, tape lines, protective casings/glass/screens, etc. Insurance and fine art experts seem to agree. Mary Pontillo, National Fine Art Product Leader at Risk Strategies Company, lists numerous measures that art institutions can employ to protect themselves, “Ensuring they have Political Violence coverage, when available and fits within their budget. Diligence with bag searches for visitors to museums. Check bags in lockers. Security guards in areas with high valued artwork, especially if the artworks are not glazed. Motions sensors with alarms can alert security guards - if someone is too close to a work and potentially respond, timing is an issue…Securing items like fire extinguishers to ensure these are not used as weapons/items to damage artwork”.


There are clearly many ways to protect precious works, and nearly all institutions have the right safeguards in place. Segal points out, “They [Just Stop Oil] purposely threw tomato soup at a painting with a protective screen, and on occasion they glued themselves to the frames, rather than the paintings themselves.” This is certainly favorable up to this point but Segal soberly reminds us, “There is no guarantee that the next person who carries out such an attack will have the same discretion, nor that the protective measures are failproof.” In other words- secure inventory and buy proper insurance coverage.


It really does take a different level of malevolent crazy to deface (or destroy) something that took someone years and years of time, effort, and work just to send a message. Thankfully, in a world as wild as this one, not all “vandals” are malicious. Back in April of this year, a British museum provided crayons as part of an activity pack over Easter weekend to children. The museum also had a 200-year-old sculpture on premises. One could only guess what occurred[4]


Squeezed for Capacity

According to Art Basel and UBS[5], art sales globally increased 3% year-on-year to roughly $67.8B, which is higher than pre-pandemic levels. With more art sales comes the need for more art storage. With the industry more than rebounding from global devastation, how has the influx of sales over the past couple of years affected the insurance at highly sought-out storage locations?


Andrew Bassier, Senior Account Executive, Fine Art and Special Risk at HUB International, elaborated more on the effect of the market and the associated collectors and collections, “The 2020 fine art market experienced a decline in sales as a result of the pandemic…However, the current fine art market presents a different landscape as renowned collectors are now displaying a willingness to invest in blue-chip art. Also, the market has seen an increase in the number of esteemed collections being put up for auction, for example, the Paul Allen collection, which generated a total of $1.5 billion in sales.”


As Fine Art is a niche and high-valued industry, using specialists for all facets of the industry is critical, and certainly not limited to how collectors and businesses manage the storage of their works. Bassier continues, “The increase in Art sales has presented fine art specialty carriers with new challenges, particularly regarding aggregation issues at renowned fine art storage facilities, and in affluent areas. These carriers have been increasingly seeking precise total values for major fine art storage facilities, such as UOVO and Crozier to implement sub-limits over those locations. Furthermore, carriers are concerned about aggregation in affluent areas like the Upper East Side of New York City, or [storage facility] Delaware Freeport, where numerous affluent collectors reside and major fine art storage facilities are located.”


Underwriters walk a tightrope when it comes to evaluating these storage locations. Essentially all specialist warehouses are incredibly well-controlled fortresses when it comes to protecting the works they’re in charge of keeping safe and secure. For this reason, these locations are highly sought out by collectors, dealers, essentially any entity that would consider storing their precious works. Having experts handling the property of collectors or even other experts in art (like dealers) is quite ideal for insurance underwriters.


All of that said, and as Bassier alluded to, underwriters must manage their aggregations and properly underwrite to the exposures (including Catastrophe) at these locations. Failure to properly underwrite and manage aggregations at the macro level will lead to situations like the current homeowner’s market in Florida. Yas Nahali-Pangle, Executive Vice President, AmWins Access, sees this happening now, “We’ve seen increase in rates, adjusting coverages, adding more skin to the game all kinds of changes to insure the ‘higher’ risks but still protect clients. Naturally [regarding Storage Locations], Florida and California [regarding Wildfire] but I find even coastal parts of New York/New Jersey to be somewhat difficult at this time. Since the entire industry is in gyration that it would trickle to all lines of business. On the personal side, high end carriers are non-renewing entire programs due to Catastrophe exposures and with that comes an influx of business into E&S which is causing some major capacity issues.” For an industry with margins as tight as Fine Art, underwriters must do their part in managing their exposure while also providing a quality promise to provide proper and fairly priced coverage.


Not all is bad, though. New entrants to the Fine Art insurance market- like Balance Partners[6]- are helping brokers and insureds alleviate the headache of the capacity squeeze. Nahali-Pangle has a positive outlook on fresh capacity, “Right now is a great time to build this line of business, especially for a high-net-worth personal lines team given than there is so much opportunity for monoline Personal Articles Floater policies with some carriers shedding business. We see some incredibly healthy collections and are delighted to have the opportunity to assist with the placements by being creative and tailoring the coverages/limitations accordingly.”


Thank you for taking the time to read our first post. If you would like to continue the conversation or catch up about Fine Art insurance in general, feel free to contact me at BLee@BalanceUW.com.


Special thanks to our contributors:


Gabrielle Segal - Principal, GS Art Concierge. Gabrielle is an independent advisor and Accredited Appraiser with the Appraisers Association of America, specializing in 20th Century, Contemporary, and Emerging Art. Prior to establishing her firm, Gabrielle worked in Business Development for an art-secured financing firm. She has a Bachelors in Art History from Hunter College as well as her Masters in Contemporary Art from Sotheby's Institute of Art. She is based in New York City.


Yas Nahali-Pangle – Executive Vice President, AmWins Access. Nahali-Pangle is an Executive Vice President of AmWins Access and specializes in High-Net-Worth coverages. She has nearly a decade worth of high-net-worth wholesale insurance experience. She graduated from the University of Florida with a bachelor’s degree in business administration and management. She is based in New York City.


Mary Pontillo – National Fine Art Product Leader, Risk Strategies Company. Pontillo is the National Fine Art Product Leader at Risk Strategies Company. She has excelled in Fine Art broking for nearly two decades at blue-chip Fine Art retail brokerages. She holds a Bachelor’s of Science in Studio Art from James Madison University, and completed her Master of Arts in Art History from JMU as well. She is based in Charlottesville, VA.


Andrew Bassier – Senior Account Executive, Fine Art & Special Risks, HUB International. Bassier is a Senior Account Executive for Fine Art & Special Risks at HUB International. For well over half a decade, he has regularly worked with numerous blue-chip Fine Art collectors across the United States, helping place insurance for their collections. He holds a Bachelor of Accounting and Finance as well as a minor in Studio Art from John Jay College. He is based in New York City.


[1] Just Stop Oil Website- https://juststopoil.org/ [2] Tribune Wired - “Art Vandalism 2023: Climate change activism against masterpiece artwork justified?”: https://www.tribunewired.com/2022/11/05/art-attacks-throwing-food-and-glue/ [3] ARTNews – “Danish Artist Allegedly Vandalizes Iconic Asger Jorn Painting in Act Some See as Right-Wing Protest”: https://www.artnews.com/art-news/news/asger-jorn-painting-vandalized-denmark-1234627162/ [4] New York Times – “Statue Is Defaced in England After Children Were Given Crayons”: https://www.nytimes.com/2023/04/24/world/europe/statue-vandalized-blue-crayons.html?smid=tw-nytimes&smtyp=cur [5] Art Basel - “The global art market grew to $67.8 billion in 2022, exceeding pre-pandemic levels” https://www.artbasel.com/stories/key-findings-art-market-report-2023?lang=en [6] Balance Partners – “Fine Art Specialty Vertical”: https://www.balanceuw.com/fine-art-specialty-vertical

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