AXA XL is a leading global insurer of fine art including paintings, sculptures and collectibles. Our clients include museums, private and corporate collectors, galleries and auction houses, and individual artists. We also sponsor some of the most prominent international art fairs, like TEFAF Maastricht and Art Basel, fund academic research on art conservation and restoration, and host a juried competition, now in its fifth year, for art students in the US.
As insurers, our primary focus is protecting these valuable assets and mitigating the losses when they are damaged or destroyed. And, in many cases, the works we insure are at least as valuable as the factories, ships, warehouses, etc., that make up the bulk of our property insurance portfolio.
Nonetheless, those factories/ships/warehouses don’t pack the same emotional resonance as, say, a collection of fine art; these are assets unlike any other.
Just as I wouldn’t call a plumber to fix an electrical problem, I wouldn’t ask one of our space or aviation underwriters —who include some of the smartest people I’ve ever met—to develop a policy for a private collector’s eclectic portfolio of fine art, classic cars and watches. Or for a museum’s special exhibition on one of the twentieth century’s most iconic artists. (Similarly, I wouldn’t expect one of our fine art specialists to underwrite a satellite launch!)
In other words, protecting these unique assets for future generations requires specialised expertise and capabilities.
It starts with the policy. Although general property policies can cover fine art in private or corporate collections, that approach can result in coverage gaps. In particular, the deductibles in property policies, which typically are based on the value of the structures and their contents, could limit the amount of protection afforded to artworks damaged by, e.g., smoke or water. That’s why I strongly suggest that fine art and collectibles be insured with standalone policies crafted by experienced underwriters and tailored to the client’s particular needs and circumstances.
It continues with the specialised services experienced fine art insurers like AXA XL can deliver to prevent or minimise losses. For instance, although art thefts can garner a lot of media coverage, they are relatively uncommon. Nonetheless, we often will review a client’s security systems and processes and, as need be, recommend appropriate measures to deter would-be thieves. (During the pandemic, we conducted many security reviews for museums since shuttered facilities operating with few, if any, on-site staff made for tempting targets.)
On the other hand, fine art and collectibles are more often damaged by improper handling while in transit or by smoke or water following a fire. In terms of the former, most property policies won’t cover artwork damaged or destroyed while in transit. Also, when an artwork is damaged, it often retains some, if not considerable, value; property policies don’t cover loss of value. Moreover, many property claims handlers won’t have ready access to the experts who can assess the damages or to the specialists who can restore the piece as close to its original condition as possible.
Another advantage of standalone policies is that the policy limits, and terms and conditions, can be tailored to the needs and circumstances of the client. They also can be updated/revised more readily.
This is another example of why fine art is an asset unlike any other. While the standard advice for private and corporate collectors is to “buy what you love and what you want to live with,” art can appreciate, sometimes significantly. Or, as a consultant who helped many high-tech companies assemble their collections put it, “more and more corporations are starting to realise something collectors have understood for years; carefully selected artworks are likely to appreciate in value.”
That is why we advise clients to periodically re-appraise their collections. If it includes many contemporary art pieces, especially from younger artists, that should be as often as every other year.
Once artists achieve some cachet or “buzz,” their work can quickly increase in value four- or five-fold. On the other hand, collections dominated by Old Masters and Impressionist-era artists should be re-appraised about every four-six years since the markets for those works tend to be more stable.
Finally, when a beloved painting or a collectible is damaged, clients naturally prefer working with a local claims handler who can oversee the process and, as need be, bring in a restorer with the requisite expertise.
AXA (and predecessor companies) has been insuring fine art for more than thirty years and has assembled a global network of restoration specialists with deep experience restoring artworks from different eras and artists and in diverse media. At the same time, here in Asia we have created, or are in the process of creating, local teams of fine art underwriters, claims handlers and risk consultants who are connected to the local art market and familiar with how it is evolving.
Dynamic, growing market
Although countries in this part of the world face an assortment of headwinds, as do those in other regions, the Asian art market remains vibrant, dynamic and flourishing. Again, unlike other physical assets, fine art endures.
Along with Singapore—where the government funds a considerable percentage of the country’s art activity—Hong Kong, China, India, Japan and South Korea all have lively art scenes featuring increasingly acclaimed artists whose works are now appearing in prominent international exhibitions and fetching eye-popping sums at auction. The region also boasts a growing number of public and private museums, galleries and auction houses that are expanding their global reach via new online models, art fairs that are achieving international recognition on par with their more established European and North American counterparts, and networks of art schools training the next generation of artists.
Given this background and considering AXA XL’s established capabilities and expertise with this specialised class of business, I believe we have the opportunity to play an important part in supporting the region’s museums, collectors and dealers. That includes working to preserve and protect fine art for future generations while also helping the region’s art ecosystems become even more vibrant.
This article was written by Sylvie Gleises, CEO Singapore, AXA XL, who can be reached at [email protected].
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