State of the Market: Fine Art Insurance

What are the most pressing issues facing fine art collectors, dealers, museums and institutions today? How will global events, natural catastrophes and carrier capacity shape the next reinsurance period in this highly specialized segment of the market? What exposures can be mitigated through risk planning?

Risk Strategies' DeWitt Stern Fine Art Practice is committed to staying on top of regional, national and global topics and trends that directly affect the fine art insurance marketplace. Our “State of the Market” report offer insights and advice to help clients attain the best insurance programs to match their needs.

As a result of the catastrophic losses of 2017, we are beginning to see the slightest bit of market hardening. Between some personal insurance companies tightening up capacity in catastrophic-prone zones and some Lloyds of London syndicates in run-off while others not writing fine art business any longer, there is some change in the amount of capacity available and the smallest uptick in pricing.

Trends in the fine art insurance marketplace:

• The global capacity for an individual fine art risk is approximately $5 billion. During the last year this total capacity remained relatively level with the exception of the AXA/XL deal being completed. As of now, we have seen them offer a maximum of $600M per risk; however, this limit may change once they complete their full reinsurance process this year.
• Most fine art specialty carriers went through their January 2019 reinsurance process without seeing much increase, which should translate into fine art premiums and rates remaining somewhat stable given positive loss history on any given account.
• After approximately six years of a soft market and prices decreasing, the fine art pricing has essentially bottomed out and prices have begun to remain flat or increase slightly. Depending on the exposure, claims history or specific insurance company’s claims experience and overall profitability, prices are mostly flat or seeing some increases (1% - 3%).

As a result of the uptick in wild fire activity, underwriters are likely to ask more questions surrounding protection of homes in brush fire zones. In the past, these questions were only asked by premier personal (homeowners) insurers who also insure fine art. It is likely that fine art specialty insurance companies will begin asking for more details surrounding the brush fire exposure, protections and disaster plans.

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Connect with the Risk Strategies Fine Art team at fineart@risk-strategies.com

Email me directly at mpontillo@dewittstern.com