State of the Insurance Market Report
2025 Initial Outlook and 2024 Wrap-Up
Fine Art Insurance
For the first time in many years, art market sales have dipped by 4%. Some factors leading to this decrease in sales are the interest rate environment and geopolitical uncertainty, among others. In 2022, many valuable masterpieces and large single-seller collections were sold; this backstock of supply has now evened out. However, the slowdown affected both gallery and auction sales.
Dealers report it takes more time to make sales, resulting in more inventory. Dealers need to prioritize proper valuation for owned and consigned artworks to ensure adequate coverage. Additionally, Risk Strategies encourages galleries to review their limits and lists of covered art fairs and locations, especially for temporary locations.
Museums continue to mount high-valued shows, while some locales experienced a pullback of state-issued funding. In addition, museums face aging infrastructure concerns exacerbated by climate change.
The fine art insurance segment is appealing and profitable for insurance companies. These factors have contributed to the past year's growth in capacity and players entering the market of fine art insurance. Rates are competitive for clients with few to no losses and located in non-catastrophic locations. With multiple insurance companies eager to deploy their capacity, highly desirable accounts can take advantage of this competitive climate. Some insurance companies, on the other hand, are re-examining profitability after years of rate reductions and have become more disciplined with their underwriting approach and some have enlisted minimum rates to ensure continued viability in this space.
Those located in catastrophe-prone (CAT) locations will continue to experience significant insurance coverage challenges, higher deductibles, and increased rates. Clients with little to no risk mitigation techniques or with a difficult claim history will find it hard to get reasonable coverage. Underwriters are also evaluating emerging climate change-associated risks. Coverage in CAT areas is exacerbated by the continued, rapid increase in art values, especially in California and Florida, where earthquake and windstorm aggregations are already nearing a tipping point.
Specific concerns for the fine art industry in 2024 include:
- When collections outgrow primary homes, main museum buildings, and gallery locations, much of the overflow artwork is placed in storage. Fine art warehouse facilities continue to face aggregation issues, especially in major art-centric geographies. Skyrocketing art values are impacting newer locales, such as Aspen, where the ultra-wealthy house some of their large collections.
- The focus on which art fairs are in demand with dealers and collectors continues to shift. Dealers are examining which fairs yield the best results.
Museums are beginning to seek specialist advice for how climate change will affect them. It is essential for museums to prepare for the future and ensure their collection and incoming and outgoing loans are protected.- Museums should consider how the geopolitical environment could affect the facilities to which they agree to outgoing loans.
Cyber events continue to occur in the art world. The interconnectedness of the art world becomes more apparent after a major cyber incident. Between the Gallery Systems cyberattack, the Christie’s hack, and recent Microsoft/CrowdStrike issues, the art world is becoming more aware of how cyber incidents can affect their ability to do business and compromise sensitive information.
Coverage Considerations
Underwriters require more information than ever to issue quotes. They are tightening requirements after paying significant claims on large private collections, shipping losses, express carrier claims, and incidents involving self-storage locations.
Appraisals for higher-valued items are a coverage requirement, as are full shipping details.
Museums are required to provide full information on transits for every leg of a journey. In the past, indicating the customs agent was ample data; now underwriters require the name of each shipping company.
The most common cause for claims is transit. As a result, underwriters expect specific shipping companies and details surrounding the artworks and travel arrangements.
As the art world seeks ways to improve its environmental impact, some are seeking alternative shipping methods via ocean freight. Almost all forms of art are at greater risk of loss or damage when shipped by ocean freight due to a lack of climate control and transport delays caused by port congestion.
In response to the cyberattacks on the art world, when available, clients should have a cyber product that provides physical loss or damage coverage for items misdirected due to invoice or shipping document manipulation.
Fine Art Rate Forecast |
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| Fine Art: | Flat to +5%* | |
| Fine Art: High Risk: |  |
+15% to +20% |
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*NOTE: Select carriers are implementing higher increases on all dealers. |
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Stay on top of art values.
It is critical to understand the sum of values at each insured location. Most collections need to be reappraised every three to five years. To have the broadest collection coverage, underwriters will ask clients to commit to this schedule.
Prepare granular underwriting information including fire and burglary protection, as well as retrofitting, relative to all locations.
Ensure you are protected from catastrophic risk and consider reallocating some higher-valued works to non-catastrophic locations or bringing in a consultant who can advise on loss mitigation practices.
Disaster response and evacuation plans will be critical for those in catastrophe zones.
Gather all relevant shipping details, drill down on first- and last-mile shipment details and be prepared to relay these details to a broker/insurance company.
Give your insurance broker plenty of notice prior to switching or moving into a new fine art warehouse to get the best possible coverage for your warehouse of choice.
Consider political violence/full terrorism coverage when lending or consigning artworks to or attending fairs in countries experiencing political unrest.
All art world businesses and institutions should procure cyber insurance.
Not only would a cyberattack affect the ability to work but revealing sensitive client and donor information through an attack could cause significant reputational harm.
Your most treasured and valuable possessions deserve custom coverage and a true partner who shares your passion, priorities, and concerns.
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Our industry and product line specialists have collaborated to provide an update on current trends and market conditions. We invite you to explore their insights by downloading our latest State of the Insurance Market Report.