MUMBAI: The Indian rich are warming up to insuring their art and valuable collections thanks to the value-added services provided by insurers and their flexibility in accepting ‘agreed value’ covers. Besides paintings and antiques, there are instances of a high-net-worth customer insuring 350 pairs of shoes. But extraordinary covers are nothing compared to what AIG insures in the US. Valuables include $13 million worth of shrunken heads, a 15th Century book written on human skin and a frozen art installation made in the artist’s own blood.
The capability for underwriting art insurance was brought to India by AIG, which has a joint venture general insurance company with the Tata Group. What is now prompting the rich to insure their collection is the availability of ‘agreed value’ policies based purely on expert valuation and the willingness of insurers to provide cover without calling for invoices or other such proof. Also, most buyers are choosing to insure their valuables not because they cannot afford the loss but because of the support they get in restoration or replacement of the valuables.
In the last four years, Tata AIG has been covering art and other valuables collection of hundreds of rich Indians and has a sum insured of over Rs 500 crore. Customers include ultra high-net-worth businessmen to film stars and the insurer has already paid out a handful of claims for theft.
Speaking to TOI, Ronald Fiamma, global head of private collections at AIG, said the company was offering products that were never before available and the mainstay of its offering was the risk management services that came along with the policy. The company manages to provide expert advice because of the talent it has recruited from the art world. For instance, Rand Silver, global director of art collection management, is an art expert formerly with British auction house Christie’s.
“There is a misconception that what keeps us awake is the risk of theft. But it is actually accidental damage that is the bigger risk,” said Silver. While the company asks the client to get the collection valued through an independent valuer before the cover, the subsequent free services includes advice on the right service providers for packing and transportation, preparing staff with the drill in the event of a storm or fire and a list of conservators in the event of an emergency. It is also not just about providing a monetary compensation. Silver says that AIG helps clients in replacing valuables, restoring damaged art and has even got Ferrari to reconstruct a limited edition Ferrari Enzo that was totalled in a crash. In another instance, the company hired scuba divers to recover a bracelet that had fallen overboard because of the heirloom’s value.
What makes art insurance different from other property insurance is the higher level of good faith. According to Fiamma, AIG has paid out claims where paintings were damaged in a bout of marital discord. “We have had a case where a lady went skiing and wore a diamond brooch over her skiing suit and lost it. We paid the claim,” said Fiamma. He adds that claims are paid even if they arise out of negligence unless it is a blatantly intentional act.