MUNICH, 20-3-2015 — /EuropaWire/ — The world’s largest art and antiques trade fair TEFAF (The European Fine Art Fair) is taking place in Maastricht from March 13 to 22, 2015. As one of the leading art insurers, a number of Allianz experts will be in attendance, along with collectors and renowned gallery owners. Oliver Class from Zurich, art expert at Allianz Suisse, will be among them.
What growth opportunities do you see in the art market?
Oliver Class: The art market has climbed back up to the high levels it had reached before the financial crisis. In 2014 global art sales amounted to approximately 50 billion euros with the highest demand coming from the U.S., China and the UK. In the current sustained low interest rate environment, property assets such as art or real estate are becoming an ever more appealing investment. This is leading to a dramatic increase in the value of individual artworks. For example, last month the Paul Gauguin painting “When Will You Marry?” (Tahitian: Nafea faa ipoipo”) changed hands for 300 million dollars (268 million euros), the highest price ever paid for a single piece. These often secret buyers are no longer exclusively art enthusiasts and long-term investors; it’s becoming increasingly common to encounter intermediary proprietors who practice “art-flipping”, meaning short-term oriented, speculative trade.
What does this mean for the art insurance business?
We are currently observing three main trends: on the one hand we’ve obviously got the sensational sales in the high price range, where prices only seem to go in one direction – up. This is also reflected in insured values. On the other hand, however, there are also areas of the art market that have been stagnating for years, such as antiques in the medium price range. And thirdly, there are even collection areas that have been witnessing a dramatic fall in prices for a while now, old tin or Biedermeier furniture for instance. Against this backdrop, we as art insurers view speculative value expectations with considerable caution, as we don’t want to encourage the movement of prices in either direction by determining insured values in a similarly speculative way. What this means is that while we follow the general market trends, we don’t intend to add fuel to the fire when it comes to developments on the insurance side of things.
What do you think of the demands for comprehensive regulation of the international art trade?
The international art trade is a very heterogeneous market. Participants include galleries, auction houses, consultants, private collectors and museums. The various sub-markets display very different characteristics. Since cash transactions have largely become a thing of the past in this day and age, I really don’t see the need for excessive regulation. More emphasis should instead be placed on self-regulation, quality control for example, as is the norm at high-level trade fairs such as TEFAF. Prices in the art trade are relative after all, and dependent on whether you are selling to an investor or a reseller.
What happens when an insured item is stolen?
If the customer is the victim of an art theft, we indemnify them as quickly as possible. By paying for the missing artwork the rights of ownership are automatically transferred to the insurer. We obviously monitor the markets carefully on the off chance that an artwork we’ve insured and indemnified one day resurfaces. For this purpose we cooperate with criminal investigation authorities such as the Art Loss Register, an international database of stolen artworks. If a recovered work of art is damaged we aren’t allowed to simply commission its restoration; this must be authorized by the artist or their descendants instead, for copyright reasons. Unfortunately the success rate in solving cases of art theft is still far too low at present.
What does art insurance cover?
- Art insurance is a classic all-risk insurance for works of art, antiques, and jewelry.
- It is possible to insure the entire contents of one’s home or valuable individual items.
- Possessions are not just insured against fire, burglary, robbery, burst pipes and storms; damage inadvertently caused by the policyholder, family members or visitors is also covered.
- The so-called “wearer’s risk” for jewelry and watches is likewise included.
- Allianz experts also offer art valuations, help with restorations, advice on optimum storage and adequate alarm systems.
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