Can fine art insurance go green?

An early introduction to the world of fine art and specie made a committed disciple of James Ferrer (pictured) who, in his 20-plus years of serving the market, has seen it from every discernable vantage point. Having studied History of Art and English at university, he went on to join the fine arts auctioneer Sotheby’s before taking his first foray into the insurance industry through a role with Chubb.

From there, he crossed over to the broking side of the market, spending 12 years in a senior role at Blackwall Green (a Gallagher company) before joining Lockton to head up its fine art & specie practice two years ago. It’s a role that offers his working life incredible variety, Ferrer said, as he has the opportunity to balance dealing directly with clients – be those art dealers, museums, exhibitions, or private collectors – with supporting the sustainability of the wider market via the provision of expert advice and education.

‘Why art’s sustainability shouldn’t come at a cost’

It was this commitment to educating the market that was behind Lockton’s recent panel event on, ‘Why art’s sustainability shouldn’t come at a cost’, which assessed the increasing pressure the art world is coming under to decarbonise its operations – and where transporting art by sea rather than air fits in with this. The panel looked to draw attention to the challenge of getting to the right level of sustainability in the art market, he said – a pressing question given the constant movement of art around the world.

“Whether international exhibitions, art fairs or changing private ownership, this movement is never going to stop happening, because world trade needs to continue,” he said. “Rather, it’s a question of looking at the way things are done at the moment and questioning how these can be done differently and more sustainably.

“Take, for example, considerations such as packaging and how we can look at that in a different way and engage companies that are doing reusable packaging that can be adapted specifically to artworks… It’s that kind of technology and innovation that is really needed.”

Where to begin the sustainability in art conversation

Given that sustainability in art is such a vast topic, Ferrer noted that focusing on packers and shippers is a great place to start the conversation as there’s real scope for change on the horizon. Shipping services including Crozier and Gander & White have been actively working with Lloyd’s to create a new shipping-by-sea clause, he said. This expertise is critical to understanding the technicalities involved and what the technology available can do to further protect artworks, while satisfying insurance requirements and offering clients more sustainable solutions. Modern shipping containers can be tracked all around the world, he said, and they’re equipped with state-of-the-art temperature control technology.

Meanwhile, a key risk traditionally identified by insurers – the impact of the motion of the sea – has been mitigated by new packaging technologies.

“So, what we’ve seen is a change in mindset from insurers on sea shipments, which have traditionally been regarded as potentially more high risk,” he said. “As tracking and packaging have become more high-tech, it has given them more reassurance that things have moved on and they should be looking to move pricing on in line with that. Historically, they were charging double the amount for sea shipments as they were for air shipments whereas, compared to 10 years ago, that has now halved.

“I know Crozier, for example, is going to be offering quotes that include both an air and a sea shipment quote for the same shipment so people have the opportunity to choose which method they want. And ultimately, where we need to get to is a place where we’ll offer a discount if you ship via sea.”

What challenges are impeding the move to greater sustainability?

There are several challenges impeding that development, Ferrer said, and the most pressing of these is how to shake up the status quo of the stakeholders at the top of the fine art ecosystem. These long-established players have founded their reputation on doing everything to the highest possible standard and it’s the role of Lockton, among others in the market, to educate them on why sea shipments now belong in that remit.

He also noted that stakeholders such as museums have more time to plan ahead and think about their shipments, whereas art galleries are always at the whim of their clients and need to think about the fastest route possible, which is still by air. That’s a pressing challenge for the sector, he said.

“I go back to an example of a private collector who came to me a few years ago and said he wanted his collection shipped in a really sustainable way,” he said. “He wanted to do things differently so we came back with a plan on how to do that which we communicated to the insurers and they were completely comfortable with that.

“So, insurance should never be a barrier. As an industry, we should be there to find a solution and to help our clients meet their aims and ambitions – whether they’re around sustainability or any other form of innovation – and help support them and promote those objectives.”