Cologne Fine Art Insurance Talks Go to the KKVG 2012 Gallery
Cologne Art Insurance Talks 2012 - Art transported on sea vessels
Cologne, April 2012
Art transports at sea: a niche for professionals or culture endangering nuisance? This was the title of the first Cologne art insurance talks that Zilkens Fine Art Insurancebroker had organized on the occasion of the Art Cologne. About 120 distinguished guests from the insurance sector (insurers, reinsurers, art experts, scientists, legal specialists, registrars), from cultural institutions (galleries, museums, corporate collections) and from the transport sector came to Cologne and controversially discussed the requirements of modern art logistics under cost and risk aspects. It was striking how little useful statistical information for the insurance industry is available for this question. At the end of the event all parties agreed that highly valuated artworks should be transported only in exceptional cases by ocean vessel.
These exceptions are following the insurance companies (Allianz, Axa Art, Nationale Suisse, Gothaer) based solely on the size or the weight of the artwork to be transported: A nine-ton and ten-meter high statue is nearly impossible to be carried by plane for reasonable prices. Otherwise applies: Wherever it is possible, the air freight or land freight should be brought forward.
The reasons given are many:
→ Compared to air freight, ocean freight gives the insurers (felt) a three times higher risk of total loss.
→ Even without total loss the forces acting on a ship and cargo which may endanger the art are unpredictable and unavoidable. This is expressed in a non-statistically proven ten times higher risk of damage.
→ General Average costs are distributed according to the value of the cargo. Since art usually is of a higher value than typically transported goods on a sea vessel the owner of the artwork participates to a mechanical breakdown or stranding even without that there has been a damage to the work of art. Dr. Bodo Sartorius from Axa Art described a claim in which the insurer had to pay one million euros.
→ The tracking and tracing of a sea container is - compared to an air cargo package - much less transparent due to stopovers and cargo exchange during the trip.
→ Last but not least, lack of specialized carriers for art transport by sea.
After all: there is no purely formal underwriting exclusion of marine transportation for art heritage of reinsurance. The insurers decide individually whether they are willing to insure sea bound art transports.
Major cultural events under severe cost pressure
The representatives of museums and galleries emphasized an aspect that makes the sea transport of art objects worth considering: the cost pressure under which suffer the major cultural events in times of high expectations and limited public funds. The cost of transport by air is factor of seven higher than the cost of transport in an ocean container. That disguises in some way the external view on the risk situation for the person responsible for costs (who rarely has an affection for the arts). It became clear that the responsible curators in regard to logistics and insurance issues in the design of their exhibitions must often due to political pressure forget about specific aspects of risk to match the cost aims. That could change because the risk awareness of danger to our cultural heritage through improper transport rises. The issue of risk management gradually gains importance in the museum and exhibition area. Non economically valued in the transport of art but of real critical importance stressed by the representatives of the galleries and museums is the contact with the few specialized art transporting companies which enable with their special knowledge that our cultural heritage while traveling does not come to harm. Their professionalism has a major impact on the development of the insurance premiums for art exhibition.
This is shown by a comparison of a very similarly designed exhibition between 1980 and 2005. The Tut-Ankh-Amun exhibition in 1980 in Hamburg, was insured for 15 million euros accounting for an insurance fee of 42,000 ?. The similar exhibition 25 years later in Bonn was insured for 540 million euros, the premium amounted to 400,000 euros. This corresponds to a rate reduction of 75 percent.
Generally the participants stated the rising value of the art markets. The insurance value of a high-profile art exhibition such as TEFAF in Maastricht can be estimated with three billion dollars. This corresponds to approximately three times the global annual premium volume for the insurance of art worldwide. Revenues in the global art market have exploded since 2000 to 64 billion dollars in 2011. At the peak of the economic and financial crisis in 2009 global art sales totaled just under 40 billion dollars.
Shift in global sales
The global sales of the art market and its venues are shifting. China's market share grows, the U.S. is declining. These shifts are also a reason why the global transport logistics chain for art is examined in terms of costs and why the sea transport as an alternative way into the deliberations of the art world - especially the galleries - keeps on. Especially young galleries are favorable to cheap transport routes and need to create an entry in the international market said the deputy chairman of the German galleries association (BDVG), Aurel Scheibler, during the conversation.
The representatives of museums and art transport companies emphasized that the best possible packaging of each work of art is vital for a safe transport. In this area you can only handle it with sufficient expertise and care. Examples were mentioned in which the proper transportation package avoided damage to art objects in spite of unfavorable external influences.
Zilkens Fine Art Insurance Broker GmbH advises the parties involved in these processes and ensures the best possible insurance protection.