The Art of Fine Art Insurance

Robert Read

Head of Art and Private Clients, Hiscox

Milan, 10th April 2013

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Fine Art

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Fine Art

Chris BurdenThe Flying Steamroller

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Fine Art

Edvard MunchThe Scream

Sotheby’s, May 2012USD 119,900,000

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Fine Art

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Fine Art

Ai WeiweiSunflower seeds (Installation for Tate Modern Turbine Hall)

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Fine Art

Tracey EminMy Bed

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Fine Art

Kylie Minogue in ‘Dancing Queen’ corset and tiara

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Fine Art

‘Dancing Queen’ corset and tiara at ‘Kylie: the Exhibition’ at London’s Victoria & Albert Museum

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The Art Market Volatility

Source: Artnet

The Art Market Old Masters

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The Art Market Modern Art

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The Art Market Contemporary Art

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Underwriting

Huge values

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Variety

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No rating guide

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Three Basic Categories

• Private Collections

• Museums & Exhibitions

• Dealers

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Private Collections

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Museums & Exhibitions

Moving Rembrandt’s “The Militia Company of Frans Banning Cocq & William van Ruytenburch” at the Rijksmuseum

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Dealers

DealersA loss is as good as a sale?

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Dealers

Salander O’Reilly• “The Enron of the Artworld” – Herald Tribune

• “Fifteen investors claim they were bilked by an Upper East Side art gallery. It’s a ‘Ponzi scheme,’ alleges one” - New York Observer

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Fairs & Storage Facilities

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Breakdown of Losses

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Criminal Activity

• 2008: Pictures worth a reported $160m stolen in a day light armed robbery.

• Two of the four stolen pictures, a Monet and a van Gogh, recovered after they were discovered in the back of an unlocked Peugot in the carpark of the local mental hospital.

• Two pictures, by Degas and Cezanne, are still missing.

• The collection is believed to have been uninsured.

CezanneThe Boy in the Red Vest

Emil Buehrle Museum, Zurich

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Criminal Activity

The Isabella Stewart Gardner Museum, Boston, USA

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Stolen

RembrandtChrist in the Storm on the Lake of Galilee

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Fire

Uppark, East Sussex, 1989

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Fire

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Fire

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Fire

MomartMay 24th 2004

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Professional Indemnity

• 17th January 2008 Lawrences auctioneers 19th C. French Claret Jug Estimate: £100 – 200

• Sold: £220,000

•Sale subsequently annulled and consignor sent it to Christies.

• ‘Discovered’ to be 11th C. Fatamid rock crystal ewer

• Sold £3,243,000 Christies 7th October 2008

• Valued by Sotheby’s at £20,000,000 25th March 2010

Superstorm Sandy

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New York, October 2012

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Conclusion

• Art is complex

• Art needs a specialist broker

• Art needs a specialist underwriter

Raul Ortega168 blinds of the Hiscox building opened or closed to create form