Fine Art and Specie: Market Update

It’s been a few months since our last market update, with a lot changing in this time.

Following a couple of years of disruption due to the Covid-19 pandemic, the Fine Art and Specie Market results have been extremely good. Many insurers have suggested far better results in a Covid environment than during the regular years of trading prior to the pandemic. Reasons for this include less exhibitions, restricted movements on transport and generally a quieter, less active world. Thus not allowing the criminal activity to operate in plain sight.

This in itself creates an interesting conundrum with syndicates and insurance companies looking at where best to invest their capital on the back of the last two years of fantastic results in the Fine Art and Specie Sector. It would be easy to take a bold optimistic view for the future, however as we have seen recently with the armed robbery at the Tefaf Maastricht

art fair, the criminals are always watching and planning to seize their opportunity. The quantum of the robbery is not a market-changing event. However, it is a rather unwelcome reminder of the impact one loss can have, being in addition to the more run of the mill expected losses, we see across the Fine Art and Specie sectors. Furthermore, we have seen a well-published armoured car robbery take place in the US, this being investigated with the quantum varying widely.

Another consideration that is effecting the marketplace is the impact of the war in Ukraine. Whilst war risk is typically excluded, the related factor effecting the Specie Market in this regard is the possible confiscation risk.

For many years this coverage has been afforded under Specie policies for Confiscation in Transit. Whilst most insurers are continuing with this coverage they are taking a closer look at the territories involved and the shipment lanes – some policy wordings may be restricted.

We then turn to Fine Art. The London Fine Art Market has seen an increase in submission flow, largely from the US markets, with some of the US domestic carriers re-evaluating their Wild Fire Exposure along with their Earthquake Exposure. The London Market has seen the benefit of this; submissions

to the marketplace have undoubtedly increased since the turn of the year, demonstrating the pulling back of some of the US domestic carriers. Whilst the submission count is up, the London Market is continuing to select only those risks that present the right risk profile for their portfolios.

Although the losses mentioned above are stark reminder of what can happen along with the uncertainly the war in Ukraine presents, it is difficult to see this specialist market hardening; particularly with so much capacity in the marketplace spread across over 40 insurance providers. Having said this, the increased interest rates across the globe could be another factor to impact this marketplace.

We are keeping a close eye on the market and starting your renewal process early with a clear plan remains key to delivering the best results for your own personal interest and that of your company.