Insuring corporate art collections

Authored by  AXA XL Global Chief Underwriting Officer – Fine Art & Specie, Jennifer Schipf

Sometime in the late 15th century, Banca Monte dei Paschi di Siena (Banca MPS) established the world’s first corporate art collection after its owners commissioned some local artists to create paintings to adorn its offices. Founded in 1472, Banca MPS is still in existence today—it is the world’s oldest surviving bank—and its well-preserved collection includes works by the Sienese artist Pietro Lorenzetti, the British sculptor Henry Moore as well as the famous Biccherna Tablets, a series of wooden tablets used for binding Siena’s accounting records.

The collection was originally assembled solely for the benefit of Banca MPS’s owners, and the works weren’t displayed publicly. But times have changed. Today, its collection is open for public viewing several times a year as the bank’s current management considers its extraordinary artistic heritage a treasure to be shared with the community. This also reflects how companies have come to understand the broader benefits of collecting art.

Art at Work

In the modern era, David Rockefeller was one of the first corporate executives to appreciate the myriad benefits of displaying art throughout a company’s offices. In 1959, Rockefeller established the Art at Work program at Chase Manhattan Bank, where he was chairman and CEO, based on his belief that the artworks displayed in public spaces and work areas can send powerful messages about an organization’s unique style, spirit and character. Or, as he put it, “art elevates the experience of working at and doing business with our firm.” Rockefeller also was a sophisticated buyer—not surprising since his mother, Abby, helped found the Museum of Modern Art in 1929—and he instructed the program to focus on emerging, developing and under-recognized artists. Other firms followed suit, and by the mid-1990s, around half of the Fortune 500 firms in the U.S. were actively collecting art, as were many major European companies.

As in the 15th and 16th centuries, today’s list of notable corporate collectors includes several prominent banks. Deutsche Bank, for instance, has the world’s most extensive collection with more than 70,000 objects, 90 percent of which were created by aspiring artists. However, the star of the collection, Gerhard Richter’s colossal Abstract Painting (Faust), is no longer on display in the lobby of the bank’s Wall Street office; it was removed from public view in 2019. UBS also has an impressive collection of 35,000 paintings, photographs, drawings, prints and sculptures, including works by Lucian Freud, Jean-Michel Basquiat and Roy Lichtenstein. Then there is JPMorgan Chase. The works originally acquired by Rockefeller’s Art at Work program form the core of its 30,000-piece collection of modern and contemporary paintings, sculptures, works on paper and photographs. This diverse collection includes works by artists from every country where the bank operates as well as masterpieces by Sol LeWitt, Robert Rauschenberg and Andy Warhol.

Leading tech companies have also started to build corporate collections, often with an innovative twist. For instance—Meta, the company that owns Facebook, Instagram and WhatsApp—founded an artist-in-residence program where local artists collaborate with employees to design and create artwork for its offices. Similarly, Apple has commissioned local artists to create one-of-a-kind murals for its offices worldwide, and employees are encouraged to vote on potential new art acquisitions and installations. Employee engagement also is a central element of Microsoft’s collection. In fact, a group of Microsoft employees started collecting art on behalf of the firm in 1987. The 5,000-piece collection focuses primarily on contemporary art and includes works by Takashi Murakami, Cindy Sherman and Chuck Close.

Enhancing the workplace environment

Today, corporate art collections figure prominently in corporate social responsibility strategies and employee wellness programs. According to Chiara Paolino, an Italian academic who has researched Italian corporate art collections and co-authored Innovating Business with Art: The Fondazione Ermanno Casoli Method, “Far from being just a passion and branding-based investment, corporate collections are now widely viewed as an enhancement to the quality of the workplace environment, one that can directly benefit a company’s social and economic health.”

Moreover, corporate collectors play an essential role in the global art market to the benefit of all corners of the ecosystem; working artists, dealers, art fair organizers, consultants, appraisers, restorers, and, yes, insurance underwriters, have all profited from companies’ desire to enhance “the quality of the workplace environment.”

Supporting living artists

Although corporate art buyers have different styles and approaches, a noteworthy trend is investing in works by living artists. Or, as a curator for a longstanding corporate collection puts it, “an important priority is collecting in a way that benefits artists.” This approach means that modern and contemporary artists are overwhelmingly represented in many corporate art collections. The reasons for this are, of course, not purely altruistic and likely include such considerations as aesthetics, cost and the ability to commission and customize artworks from living artists.

Regardless, the outcomes for living artists whose works are acquired by corporations are consistently positive. According to research into Dutch corporate art collections by the University of Amsterdam’s School for Cultural Analysis, “Many corporate collections, from multinationals to non-profit organizations, showcase ‘avant garde’ art produced by artists just entering the art market, increasing these artists’ chances to be canonized and recognized as part of Dutch cultural heritage.” The University’s research also found that corporate art collections contribute up to 20 percent of the demand for contemporary art in the Netherlands. Chiara Paolino confirms these findings, saying, “From an artist’s point of view, involvement with a company can lead to important external life and growth opportunities since it offers them the freedom to explore art in a new context, which, in turn, may well deliver benefits in subsequent projects.

Protecting valuable assets

Like other valuable corporate assets, companies should take appropriate measures to protect and preserve their artworks. For corporate—and private—collectors, we would recommend standalone fine art policies tailored to their particular needs and circumstances. That is because most general property policies won’t cover artworks damaged or destroyed while in transit—the most common type of loss—and the deductibles on property policies will often limit how much compensation clients receive for works harmed by smoke or water, the second most common loss scenario. Other benefits of standalone coverages from an experienced fine art insurer include advisory services to address new risks—e.g., those associated with online art sales—and ready access to expert appraisers and restoration specialists.

Although theft generally is a less significant risk, especially with the proliferation of video surveillance systems in use today, artworks, especially smaller pieces, go missing occasionally. Thus, we would also recommend that companies with extensive holdings, especially those with high-value works from well-known artists, periodically review their security systems and processes and, as need be, implement appropriate measures to deter would-be thieves.

Finally, since values change, companies—and, again, private collectors—should have their artworks re-appraised about every three to five years; just because a piece was worth one amount when it was purchased doesn’t mean that is its replacement value today.

In today’s modern work settings, which are designed mainly for efficiency and productivity, all of the evidence shows that owning and displaying art benefits companies on multiple levels, including branding/promotion, employee wellness and corporate social responsibility. And with proper preventive measures and protection, companies’ art collections will be enjoyed by future generations just as Banca MPS’s is by people today.