In the specie area of insurance, diamond processing insurance could be described as a ‘niche within a niche’. Although established for many years now, it is something which is excluded from the standard Jewellers Block Form and has only been available from a few select markets as a more than often, expensive ad hoc stand-alone coverage.
However, in the last three to five years we have seen the availability of this insurance grow considerably as new insurers enter the market place, either offering to lead, or offering capacity to follow markets. The growth in the market has coincided with advances in technology with regards to how the process for polishing diamonds, and more importantly, cutting diamonds is undertaken. Insurers are more educated on who is preparing the pre-risk Survey reports and who is undertaking the work.
At JLT Specialty, we are at the forefront of this growing market and understand the developments taking place. It cannot be underestimated how important it is for clients to utilise the best facilities and cutters available when choosing who carries out the work on the stones on their behalf, not only to achieve the best results on the diamond but also to obtain the best insurance terms available.
With better technology available to diamond cutters, this allows them to see into rough stones more than ever before and avoid the pitfalls of a hazardous cut or polish. Partly due to this, the market is seeing an upturn in the performance of this type of insurance.
So what does this mean for clients?
Fewer losses are occurring, in addition to the increased capacity in Lloyd's and the international market means that rates are decreasing. The knock on effect is that more and more clients are looking to purchase this type of protection for their investments as it is seen as more affordable and a worthwhile additional cost.
With more people buying diamond processing insurance, we are seeing an increase in ’low risk’ polish and cutting risks entering the market. In the past these may have been self-insured as the perceived value in the insurance wasn't there for clients. Now these low risk stones are helping the market remain buoyant. Since we are a major broker for diamond processing insurance, this increased activity in the market is allowing us to leverage the terms even more.
The result - more competitive premiums, better coverage and more choice for clients.
For further information, please contact Paul Carr, Partner, Fine Art, Jewellery and Specie on +44 (0)20 7466 6284