How the art market has navigated the pandemic

Authored by AXA XL Global Practice Leader, Fine Art Insurance, Jennifer Schipf

Amid a world standing still, the art industry has found innovative ways forward

In a world that relies on exhibits and direct connections, how can you press forward when everything shuts down? For the art industry, the answer was to innovate.

For much of the art world, exhibitions, fairs, and the ability to connect in person with art patrons is the lifeblood of the industry. Yet when those live events were not possible, many in the industry found their silver lining in the same resources that have helped businesses around the globe reconnect with their employees and customers – technology.

Through virtual art fairs, exhibits, and sales, the art industry has weathered the massive shift in business in ways that may well become part of the industry fabric going forward. Innovation borne of necessity, it seems, has become a boom for the industry.

That boom did not come without its challenges. As the pandemic forced cancellations of art fairs and exhibitions, the lack of physical events hit the industry hard. Used to conducting business, networking, trading and actively conducting business, many in the industry lost revenue at the outset.

When art goes virtual

However, hardship forced innovation. Within just a few short months, art fair organizers had shifted to an entirely virtual model. Online viewing rooms, or OVRs, became standard fare, replacing some of the major global art fairs that were critical to dealers, artists, and traders. When shows in Basel, Switzerland and the like were canceled OVRs became the connection for all in the industry.

That digital connection has become a welcome pivot, including for galleries, which rely on fairs to increase business and promote artists. With the revenue savings from unused travel budgets now reallocated to building digital platforms, many galleries have been able to increase their footprint in the art space, extend their network, and reach new patrons. Now, anyone anywhere can browse gallery offerings and purchase art from their homes.

The epitome of that move to digital was the creation of Art City, the first virtual art exhibit to be displayed as a virtual city with shops lining virtual streets. Virtual visitors use a mouse to hover over any building, which displays the gallery information. Yet the most interesting part of the city is its “inhabitants” – the galleries include dealers and traders from all over the world. For the first time ever, an art patron, trader, or dealer can visit a world’s worth of galleries with the click of a mouse.

AXA XL in Art City

That convenience has made it easier for AXA XL to extend its outreach for our annual AXA Art Prize. The four-year-old prize created in conjunction with the New York Academy of Art seeks to support art students in their education by offering a $10,000 cash prize to the winner as a way of supporting emerging artists. Last year, we were able to display virtually in Art City, a move that increased awareness of the prize, and helped to promote the students’ works.

Through our outreach efforts to various art schools and programs, we have connected with world experts in the curatorial world, in galleries, and in the commercial artist arena. Those experts were quick to agree to collaborate to help build a system that would support emerging artists through the promoting of and awarding of the AXA Art Prize.

Through contact with these experts, students from schools across the U.S., and from all communities and ethnic backgrounds, are invited to submit their artwork, which is then judged by a different jury panel each year. Those judges are industry experts, professors, curators, and commercially viable artists. In the past, the Art Prize exhibition would be installed in different cities in a traveling exhibition. In 2020, the exhibition went virtual and therefore: global.

It also grew in scope. The Art Prize attracted more than 600 submissions in 2021, a sharp increase over the 400 submissions from the year prior. From that number, we selected 40 objects for the exhibition. Students who are chosen, have the added benefit of listing well-known and respected curators on their CVs, which lends more recognition and credibility to their work.

The revenue boost

So is the profitability for the art industry. With the move to virtual operations, many auction houses have realized dramatic sales increases on their digital platforms in the last year. The shutdown of travel meant art patrons with disposable income were now purchasing from online galleries and exhibitions, not to mention those new to the art-buying world who may have discovered must-have pieces.

With access to art online, buyers were showing plenty of confidence in purchasing objects virtually. By various estimates, the high end of online sales prices has increased from an estimated $50,000 in 2019 to nearly $200,000 in 2020.

Crypto Art

2021 is already shaping up to be similarly successful for the art industry, and that success could be boosted by the emergence of digital art as a sought-after art medium. In March 2021, a digital collage by an artist named Beeple sold at a Christie’s auction for $69.4 million.

The sale was unprecedented – it was the first digital artwork to sell for more than physical artwork by any number of better-known living artists. It was the first time the artist had ever earned anything near the sale price for his work. And it was the first time a major auction house had offered a digital object with a non-fungible certificate of authenticity, or NFT.

That validation of NFTs as a legitimate form of authentication could well drive future sales of digital work, which has accelerated as a medium since the pandemic ensued. NFTs are electronic identifiers used to confirm authenticity by recording details in a blockchain ledger. NFTs verify the ownership of digital works.

Continued evolution

Such innovation will only continue. Celebrating a new global presence thanks to technology and its own internal evolution, the art industry can reach across boundaries and borders and connect artists from all regions and all communities.

From new ways to look at art to new ways to view and buy, the industry has seized the opportunity that technology can bring. Now, with the realigning of accessibility to content by organizers, visitors to museums and galleries and fairs can see more of the exhibitions than an in-person visit would afford.

AXA XL is proud to be part of the effort to bring fresh, new voices to the art industry. As the art world continues its evolution, we too will continue to innovate risk management strategies and insurance products to help protect art in all its forms.