Record price highlights need for specialist fine art cover
30 June 2008
As the latest Claude Monet to be offered at auction reached a record for the artist’s work, a leading Lloyd’s broker has said the need for specialist fine art and specie cover has never been more acute.
A mystery buyer has paid a record £40.9m for Monet’s Le Bassin Aux Nympheas, which shattered the expected sale price of £24m, and was double the cost of the artist’s most expensive previous work which had sold in May for £20.9m.
The high fee supports an interim report by Lloyd’s insurer Hiscox-Art Market Research, which has found that 19th Century European art has seen a 13% rise in value since March 2007.
The findings tracked auction sales from March 2007 to March 2008, thus covering the six month periods before and after the impact of the global credit crisis. It gives, therefore, an early indication of the strength of the art market in the current financial climate.
However, the more mid-price works have not fared as well. While big ticket items are still proving attractive to private investors, a number of mid-range priced lots of around £150,000 to £1m - which have traditionally had a strong following among the big earners in the City – have remained unsold.
Charles Dupplin, art expert at Hiscox, said: “The current art-buying scene is a tale of two markets. The big ticket, record-breaking items are still being bought by wealthy individuals, with relatively new entrants to the art investment market, from Russia and Asia, for example, adding to demand. This area of the market is bucking the general economic trend, even if the rise in value does seem to be slowing somewhat. However, the mid-range items up to the £1m mark are suffering, and I suspect some City-based collectors are feeling the crunch.
“Although the full picture won’t be known until later this year, it does seem that the art market is remaining reasonably robust, with some specific segments, such as 19th century European art, even undergoing a form of renaissance.”
Barry Vickery, of Aon Risk Services’ global fine art and specie team, said the market was such that the broker had launched a campaign internally to ensure their intermediaries across the world were aware that clients with fine art or specie risks needed to check the sums they had placed on their collections.
“The value of fine art has risen considerably and this increase in value has meant that private collections are in ever greater need of bespoke insurance solutions which go above and beyond what would be included in high net worth cover.”
Vickery said: “There is capacity and there are the markets for fine art and the significant majority of those markets are in Lloyd’s and London because of its traditional expertise.
“There is still, in some areas, a lack of awareness as to the potential value of collections and the need to ensure they are covered by a policy which has been designed and rated specifically for particular pieces or collections.”
Last updated on 30 Jun 2008
