Insurance of works of art all caught fire – Investing

To protect their artistic heritage, more and more collectors are choosing specialized insurance. Conventional fire policy does not sufficiently cover this type of property.

“Belgium has an extremely rich artistic heritage,” explain Timothy Bruce and Peter Stevens. Their employer, Hiscox, listed on the London Stock Exchange, is one of the world’s largest art insurers. “This legacy is also more important than we think, because a lot of work remains hidden, it continues. More and more works, the existence of which we did not suspect, are coming to the surface. not related to this. They encourage more and more collectors to include their artwork in the planning of their homestead. This requires an accurate assessment of the work. This is often much more expensive than expected. The owners suddenly realize that the work is insufficiently insured. The result: there is a growing demand for insurance that specializes in works of art.

“Belgium has an extremely rich artistic heritage,” explains Timothy Bruce and Peter Stevens. Their employer, Hiscox, listed on the London Stock Exchange, is one of the world’s largest art insurers. “This legacy is also more important than we think, because a lot of work remains hidden, it continues. More and more works, the existence of which we did not suspect, are coming to the surface. not related to this. They encourage more and more collectors to include their artwork in the planning of their homestead. This requires an accurate assessment of the work. This is often much more expensive than expected. The owners suddenly realize that the work is insufficiently insured. The result: there is a growing demand for insurance that specializes in works of art. “The growing interest in art as a form of investment is also increasing the demand for specialized insurance,” said Frederick de Haan, managing director of the insurance company Vander Hagen. Founded in Brussels, it cooperates with more than 700 brokers in Belgium. “Because of low rates, individuals are increasingly turning to other investment products, such as vintage cars or works of art, to diversify their wealth. And as the growth of online offerings has made it more accessible, art has become a crossroads for more enthusiasts, and working from home allows collectors to pay more attention to their property. I wonder if their work is confident enough. ” “The growth in sales of works of art also encourages subscription to specialized policies,” confirms Jan Van Hecke, art and insurance specialist at Vanbreda Risk & Benefits, which also offers individual insurance. However, these two phenomena are not real. not directly proportional, because, despite the efforts of insurers and brokers, the insurance of works of art is still insufficiently known, and the benefits of such policies are not fully appreciated. It is a policy based on the principle of covering all risks, with a few specific exceptions, such as voluntary damage or poor preservation. ” wider conditions, “says Jan Van Hecke. The classic cube is always accompanied by a franchise, which usually does not apply to specific fonts for works. In the collection segment of at least 10 works worth more than 100,000 euros, the penetration of art insurance in Belgium does not exceed 50%. up to € 1 million, I estimate that specialized fonts do not exceed 33%. Museums and other cultural institutions usually insure their long-term and temporary loans exhibitions, but only because the creditor requires it. Due to the lack of a sufficient budget, some museums cannot provide the most beautiful works of the permanent collection. As a result, it is often the case that real masterpieces are not insured or only partially insured, for example, only for the restoration cost. Vanbred’s expert notes that the authorities are not sitting idly by. “The Flemish government, for example, has issued a decree on compensation. In the case of temporary exhibitions, part of the risk associated with renting publications is borne by the region, the rest – a private insurance company. The goal is to enable museums to bear the costs of private insurance for the most prestigious exhibitions and thus receive the most beautiful works. ” “The main competitor of the insurer, which specializes in works of art, remains” lack of insurance or insufficient insurance “, confirm Timothy Bruce and Peter Stevens of Hiscox. tangible assets are still growing. “It is estimated that about 10% of the richest Belgians’ assets already consist of jewels, coins or collectibles and works of art. Growing new rich art lovers should further increase this percentage, especially in the current context of low interest rates.” , – predicts Frederick de Haan. “In recent years, we have recorded an annual growth rate of 10-12% in Belgium. We expect this to continue at this rate in the coming years. On the one hand, because we expect to see more hidden work coming to the surface in the coming years. , on the other hand, because we see more and more young people being interested in the world of art and investing in art, ”explains Timothy Bruce.“ When galleries closed during the pandemic, online sales grew. The catalogs are quite rich, and buyers are quick to see this new type of deal, especially the youngest ones. , – explains Frederick de Haan. According to an international study by Hiscox, online transactions now account for a quarter of art sales, from $ 6.8 billion in the first half of last year to more than $ 13 billion in auction houses today (Sotheby’s, Christie’s and Philips), undoubtedly leading Sotheby’s. 65% of online sales of three large houses. The average amount of an online transaction last year was $ 25,000. In 2019, it was still less than $ 9,000, according to a study by Hiscox. Hiscox is a young man who has collected a collection worth 50,000 euros and wants to insure that he pays an annual premium of 219.80 euros, including taxes and fees, according to a special policy of Young Collections. Vanbreda Risk & Benefits applies a minimum annual premium of € 250, including taxes and costs, to the insurance capital of works of art of less than € 100,000. For the € 50,000 fee, Vander Hagen is asking for a € 168 bonus, including taxes and expenses. However, insurers say they offer several types of policies adapted to works of art. To learn more, you can visit their website. “So far, art insurance has hardly been affected by the hardening of the insurance market, which has been going on for several years, especially when compared to cyber insurance and fire insurance. In these segments, bonuses are growing and underwriting conditions are becoming increasingly stringent, ”explains Jan Van Hecke. However, an increase in premiums for insurance of works of art as a result of other policies seems inevitable. “Increasing the number of natural disasters increases the risks of reinsurance. This phenomenon can affect art insurance premiums. In addition, materials and transport are becoming more expensive. The price of wood has risen tremendously, and so have the wooden crates that carry the artwork. The internationalization of the market, and in particular the growing demand for works of art in Asia, has led to increased traffic. But the increase in premiums will not only normalize the situation, as premiums for insurance of works of art have not followed the growth of premiums in other markets in recent years, “said Timothy Bruce.

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