Fine art and specie insurance market update

17 May 2017

Six months ago we advised that the market acquisitions seemed to have slowed in the fine art jewellery and specie insurance market. 

Over the past three years we have seen a highly competitive environment, with many of the leading underwriting syndicates increasing their capacity to write specie business as well as increasing their underwriting expertise. 

In the past six months we continue to see new companies looking to enter the fine art and specie market, however, following the recent competitiveness of the marketplace we are seeing a great deal more caution when considering entering as margins and profit are undoubtedly being squeezed. 

The question is do we see the market environment starting to change. We have certainly seen an uptick in losses, particularly in the cash in transit and jewellers sectors. The cash in transit market has seen various incidents taking place across Latin America with Brazil being heavily impacted. These losses equate to millions of dollars, along with some widely reported incidents around various airports. 

Within the jewellery sectors the breadth of coverage has been widened over the past couple of years, losses as a result of some of this widening of coverage are starting to impact the market. Particularly with respect to travelling salesman and third party fidelity coverage. 

When considering the most loss active sectors within this niche market (being cash in transit and jewellery). The fine art and general specie sectors remain benign in terms of losses versus premium values. 

Due to the profitability of these sectors and the greater competition within the marketplace these sectors have come under significant competition in the past three years. The question remains how sustainable are the continual rate reductions and what affect do these have on the markets ability to pay claims efficiently?

We certainly are continuing to see rate reductions across all lines of fine art, jewellery and specie business, we feel it is more important than ever to consider the market cycle. 

With our specialist brokers in the marketplace on a daily basis, our sense is some syndicates are starting to feel the impact as a result of the losses. 

Choosing an insurer who has historically shown a long term commitment to this class of business remains key, with these markets demonstrating they have the knowledge and ability to offer the flexibility in the product they offer. 

These insurers have invested in qualified underwriting and claims staff that have the knowledge to deliver an underwriting and claims performance one would expect. These attributes remain of paramount importance through this highly competitive but changeable period. 

A couple of final points for consideration, working with a specialist broker that can allow you to spend the time to get to know and build a relationship with your insurers during this period remain invaluable. This insurance relationship may turn out to be one of the most valuable business relationships you have if your business is subjected to an unfortunate loss.

A further point to consider is as the cycle continues and changes, it becomes more important to have a planned strategy for your renewal not only in the short term but also over the longer term allowing you to manage your insurance coverages and respective costs, rather than being at the mercy of the market changes during the cycle that may be coming down the road. 

A clear strategy will not only allow your company greater protection but it is also likely to be able to achieve it in the most cost effective manner. 

For further information, please contact Barry Vickery, Deputy CEO of Specie Fine Art and Jewellery on +44 20 7528 4598 or email