Art & Specie

In this chapter of our Annual Insurance Review 2023, we look at the main developments in 2022 and expected issues in 2023 for Art & Specie.

Key developments in 2022

In a year that has seen flash floods, record high temperatures and wildfires, the physical protection of insured artworks has been a prominent issue in 2022. 

The increasing number of claims resulting from damage caused by extreme weather means that insurers are seeking to mitigate the risks they face by either excluding climate and environmental damage in at risk areas or, if such risks are to be covered, requiring policy holders to put additional safeguards in place at their properties. Such safeguards are not unheard of within the art world and museums and galleries in high-risk areas (such as the Whitney Museum of American Art in New York and the Pérez Art Museum in Miami) have been investing heavily in protecting against flood and hurricane risks respectively for several years now. However, if an additional burden is to be placed on private policy holders by insurers, this may lead to a rise in the use of secure art storage facilities in less vulnerable locations where, in addition to having secure (and often fire and flood-proof) facilities, the temperature, humidity and light is controlled to ensure that artworks are kept in optimum conditions.   

What to look out for in 2023 

Artificial intelligence is having an increasing influence on the art market, both as the artist (through software such as Dall-E) and as an expert 'eye' authenticating works of art. 

Historically, the attribution or authentication of a work of art (and thus its valuation) was based on an expert opinion and perhaps bolstered by technical analysis, such as infrared reflectography or an x-ray. Artificial intelligence is now entering this space. Its technology works by analysing hundreds of images of works by an artist (including their brushstrokes, object placement, use of colour and compositional elements) and then comparing a given piece against this bank of images. Where the AI analysis results in a conflicting opinion to that reached by an expert, it can pose difficulties for owners, experts and insurers alike.

By way of example, this year, a Swiss-based company called Art Recognition used its artificial intelligence software to determine that the only Titian painting in Switzerland (Evening Landscape with Couple in the Kunsthaus Zürich) is not, in fact, by Titian. Whilst this analysis was carried out without the consent of the museum and without a high-resolution image from them, the company claims that its AI software is 90% accurate and has now publicly called into question the authenticity of the work. The use of this technology thus makes it more difficult to assess the correct position when attributing an artwork and there is a risk that, as this technology becomes more commonplace, professionals become exposed to litigation if an attribution is later found by AI technology to be inaccurate. Where there are competing opinions, it will also make it more difficult for insurers to value works of art under policies. 

Written by Nadia Asfour.

Download our full Annual Insurance Review 2023 for more insights.