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Let's Talk: The Art of Underwriting

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Fine art and collectibles require a specialist insurance approach. Museums, private collectors and corporations all require coverage for their valuable, and often extremely delicate, artworks. Tania Bensoussan-Arthur, underwriting manager, specialty for France, and Mathilde Duthoit-Michelet, underwriter for fine art and specie in Paris, discuss the risks museums and collectors face and how this coverage works.


Who buys fine art insurance?

Mathilde: Fine art insurance can cover museums, galleries, exhibitions, corporate art collections and private collectors. In many countries, such as France, major museums are public and their permanent art collections are insured by the state. But insurance coverage is needed when artwork goes on loan to other museums, for example. In some other countries, such as Germany and Sweden, large art galleries’ collections are insured in the commercial market. Buyers also sometimes need coverage for antiques, collectables and jewellery, among other things.


What are the biggest risks that need coverage?

Mathilde: The major risk for fine art is not theft, as one might imagine, but transportation. The conditions that art must be kept in during transportation vary depending on the type of work – for example, the conditions would be very different for a photograph than for an installation. Any handling of the artwork is a risk. If the work is on paper or canvas then you need to check the humidity and be sure that the air conditioning is sufficient. And for artworks such as tapestries or photographs, you need the light conditions to be correct. The museums are extremely conscientious about this. A new challenge is managing risks associated with contemporary artwork which is displayed outdoors. The artwork might have no permanent state and also is exposed to risks including vandalism, weather events and terrorism. So museums and their insurers need to be mindful of this.

 

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When the Seine flooded in the summer of 2016, the Louvre and the Musée d’Orsay put into place their plans to move artwork stored in their basements.

 

Who is in charge of risk management for art collections?

Mathilde: Museums have curators, who typically are art historians, who know everything about the artwork in their collections. And they also have a registrar who is the contact for the broker. And they manage the risks of storing and transporting artworks.


Have there been any recent examples of museums needing to activate their risk management plans?

Tania: When the Seine flooded in the summer of 2016, the Louvre and the Musée d’Orsay put into place their plans to move artwork stored in their basements. The museums temporarily closed to enable that artwork to be moved out of harm’s way. Those museums have well-rehearsed plans in place for such events.


What is the fine art insurance market like?

Tania: The fine art market does not really see attritional losses. There may be large losses, but there do not tend to be attritional losses. Public contracts tend to be fairly long – four or five years – to provide security of coverage. We write coverage for jewellery and antiques and collectibles too. Sometimes both jewellery coverage and fine art can be written on the same policy if, for example, an artwork contains a lot of gold.


About the authors:

Tania Bensoussan-Arthur is responsible for underwriting Specialty risks in France, including Marine and Fine Art & Specie insurance. She can be reached at  tania.bensoussan-arthur@xlcatlin.com. Mathilde Duthoit-Michelet specialises in Fine Art insurance for private and corporate collectors as well as art professionals. She can be reached at  mathilde.duthoitmichelet@xlcatlin.com.

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