Why local knowledge is key to understanding art risks

Authored by Hans Laenen, Product Leader, Fine Art, Specie & Private Clients - APAC & Europe & Alain Wijnants, Country Leader – Benelux

In the latest in a series of interviews with product leaders and country leaders, Hans Laenen, Product Leader Fine Art, Specie & Private Clients APAC & Europe based in Amsterdam, and Alain Wijnants, Country Leader Benelux, discuss how the COVID-19 pandemic has affected trends in the art world and why local knowledge is key to understanding specialist risks.

Hans, can you tell us about your role and the types of risks your team underwrites?

Hans Laenen: I lead a team of experts in fine art, specie and private client risks across the Europe and APAC region. We have specialists in the Benelux region, Germany, Switzerland, France, Italy, Spain, Singapore, Hong Kong, Australia and Malaysia. We underwrite a wide variety of business including coverage for museums, galleries and private collections of valuable pieces of art or even stamps, for example. We also offer solutions for the watch and jewellery industry (manufacturers, retailers and wholesalers), cash-in-transit and valuables while they are being transported, among other things.

We want to focus on those risks where we can really add value for our clients. For example, our art teams have deep expertise in art history as well as understanding of the current trends in making, buying and selling artworks. This is an area where our expertise differentiates the coverage we offer.

Looking at fine art, what are some of the biggest trends in the art world currently and how can risk transfer play a role?

Hans Laenen: In recent months there has been an acceleration in the trend towards art being bought and sold at online auctions. This was something we were seeing before the global COVID-19 pandemic, but it has picked up markedly over the past year or so. With restrictions on the movement of people, online auctions became the safest and most practical way for art to be bought and sold. The major auction houses have all invested in online infrastructures to facilitate virtual auctions and this is a trend we expect to continue even when current travel restrictions are lifted. Traditional, in-person auctions will also return, of course.

While one may think that the move to online auctions reduces the risk, this is not necessarily the case. The art may be less exposed to physical damage in online auctions as there are fewer opportunities for people to handle or touch the works, which reduces the risk of damage somewhat, but the conditions in which it is kept and displayed – the light or humidity, for example – remain hugely important. This is why our experts work with collectors of all types to help to ensure artworks are protected regardless of whether the auction is in person or online.

Our art underwriters are able to work with our cyber underwriting teams to understand the intricacies of art being bought and sold online in order to help our clients to manage and transfer those potential risks.

Another trend that we are seeing is an increasing interest in digital art which collectors invest in using non-fungible tokens (or NFTs). There have always been disruptive trends in the art world and this one aims at making art accessible to more people. This is a development which our experts are following with interest.

Has the COVID-19 pandemic affected the risks to art collections and their owners?

Hans Laenen: Claims have remained pretty stable over the course of the pandemic. Curators of collections are very risk-conscious and they take the necessary steps to protect artworks – it is their natural instinct.

In some countries, art galleries have been open, or partially open, to the public with social distancing measures in place during the pandemic, while in others galleries and collections have remained closed. We have been keeping abreast of these developments and communicating with our clients across the region to understand how collections were being displayed, stored or transported in order to help them best manage the risks.

As museums, galleries and collections look to reopen more fully over the coming months, they will be mindful of the need to do so safely – both from the standpoint of the health and wellbeing of visitors and of protecting artworks from damage. Our underwriters will continue to work with clients in this effort.

Why is local expertise so important in underwriting art risks in the Benelux region?

Alain Wijnants: The Benelux region has a proud tradition of art, from the Old Masters to the modern day. Understanding of the local culture, art scene and infrastructure, and having experienced experts on the ground means we can better support our clients in managing their risks, whether they be permanent collections, temporary exhibitions, galleries, or standalone private collections large or small wherever that work is displayed, stored or transported.

Hans and his specialist teams work with our clients across Europe and APAC to build relationships and understand the challenges and opportunities they face within the global and local trends in the art world.

As well as underwriting art risks, we partner with events, such as art fairs like Art Basel and TEFAF and as we begin to emerge from the COVID-19 pandemic we look forward to attending these events again where great art can be enjoyed by all.