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Interview with ARIS Art Title Insurance

January 4, 2011 by Marion Maneker

Art Market Monitor spoke with Judith Pearson and Lawrence Shindell just before the holidays (click on the player below to listen to the interview):

[audio:http://www.artmarketmonitor.com/wp-content/uploads/2011/01/FInal-ARIS-Interview.mp3|titles=FInal ARIS Interview]

The Economist covered ARIS when the company was sold to Argo in November:

“Theft accounts for only a quarter of title disputes,” says Judith Pearson, a co-founder of ARIS, a small insurance firm that has been selling title insurance since 2006 and which was taken over by Argo Group, a bigger insurer, earlier this month. Three-quarters of squabbles occur in cases of divorce or inheritance when a spouse or other heirs challenge a seller’s right to sell. A work of art may also carry liens after being used as a collateral for a loan. More rarely, two or more artists may collaborate but then disagree about who has authority to flog their co-production.

Does the risk of title disputes warrant the cost of title insurance? ARIS charges a one-off premium of between 1.75% and 6% of the art’s value. In return the company will cover the legal costs in case of a title dispute and compensate for the agreed value of the art if their client loses the ownership dispute. ARIS has so far written about 1,000 policies and has not yet had a claim.

Peace of Mind (Economist)

Hiscox Has Doubts

December 1, 2008 by Marion Maneker

Spooked by the Russian Sales in London

The Telegraph runs a brief story in the aftermath of London’s disappointing Russian sales. The newspaper turns this quote from Hiscox’s Charles Dupplin into the whole story:

“No matter how rich you are, probably your confidence has dropped. In 1991, prices fell about 50pc for Impressionist art. There is no reason to believe that history might not repeat itself.”

(More tales of the insurance trade after the jump.)Continue Reading

None of that Art is Going Away

November 5, 2008 by Marion Maneker

The Financial Times takes a look at the burgeoning art storage business. Alison Gregor turns that into a fascinating tour of the collector’s side of the art boom–even as it sets up for a lengthy hibernation. Where will all of the art go in a recession? Storage or will the increasing circulation of art continue?

A burgeoning fine art market saw sales surpass $40bn in 2007, which was a catalyst for the growth of a fine-art storage and logistics industry. Even though sales might slow with the financial crisis, and indeed, art collectors will be watching forthcoming auctions with trepidation, the fine art being bought and sold – and which does not make it into museums, galleries, corporate offices or homes – must be stored somewhere. This is a task that involves a high degree of specialisation.

Besides cataloguing, packaging, shipping and installing the art works, fine art storage facilities house them for long periods in crates inside vaults controlled for such factors as temperature, humidity and light. The warehouses also have viewing rooms where pieces can be bought and sold, photographed, assessed or repaired. [ . . . ]

There are about 100 to 125 top-notch fine art warehouses worldwide, according to Bob Crozier, founder and president of Crozier Fine Arts, along with dozens of smaller, regional facilities in various countries. [ . . . ]

Sigrid Thorne, chief executive of Fortress Corporation, which has fine art warehouses in New York, Boston and Miami, said private collectors are the fastest growing segment of her business.

“Values in the modern art market have gone up 20 per cent a year for the last six years,” she said, though that growth may lag behind this year. “That’s very attractive. And the pieces are so large, most people cannot install them in their homes. They have to put them in storage.” Once there, the works are often shipped in and out by serious collectors to museums and galleries for shows.

“People loan their art work out for various museum shows throughout the world, so maybe it comes out of their storage for a while, and then maybe it goes into their homes,” said Andrea Hazen, an art adviser with Hazen Partners Art Advisory. [ . . . ]

“One of the ways this business has really changed is that it’s really no longer about storage,” he said. “It’s about private banking. We know who’s shipping what, who’s buying what, and we become sort of the keepers of secrets.”

With the number of loans from Transcon’s private collections soaring, what was once “slam it into a case and send it” is no longer, Mr Blodget said. Countless condition reports are done at all stages of the shipment for insurance purposes.

John Mullane, president of Transcon, said insurance companies have shown growing interest in fine art storage facilities as the values in the fine art world increase exponentially. “We had a collector who bought a piece about two years ago for about $600,000, and [five or six] months ago, it was sold for $12m,” he said. While appreciation rates of 1,900 per cent over a short period may no longer be seen in the market, insurers are nonetheless paying attention.

Precious works housed in armour (Financial Times)

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