Majority of Art Thefts Uninsured or Under-insured, Chubb Expert Tells Conference
LONDON, June 12, 2006 - "Historically, the most notorious art thefts have not been insured," Dorit Straus, worldwide fine arts manager at Chubb
Group of Insurance Companies, told an audience of academics, museum curators, lawyers and law enforcers last week.
She said that, contrary to the glamorous portrayal of investigators and claims adjusters in blockbusters like "The Thomas
Crown Affair" and "Entrapment," most art losses are not reported in the media, likely involve insider theft from museums and
storage facilities, and are often uninsured. Vast numbers of private collections are uninsured or under-insured, too.
Straus, who is based in New York, was speaking at the first multi-disciplinary conference on fine art theft and the protection
of art collections organized by CRASSH (Centre for Research in the Arts, Social Sciences and Humanities) at Cambridge University
(June 9-10). Titled "Theft: History, Prevention, Detection, Solution," the conference aimed "to develop strategies to curb
the rampant plague of art crime."
She said the uninsured-risk problem was far greater in Europe and Asia, where most museums are owned by the state. In the
United States, many institutions are not-for-profits with boards accountable for the collections. The use of insurance as
a risk-transfer tool is, therefore, common for those charged with fiduciary responsibility. "Institutions and individuals
that are not insured should still employ the same methods that underwriters use when selecting and managing risk," said Straus.
Talking on ''the implications of art theft on the insurance industry,'' Straus said the ''suppressed'' loss ratio resulting
from widespread uninsured or undervalued losses reduces the overall impact and influence of the insurance industry on fine
art theft and good risk management.
Loss ratios for art theft are generally low, she said. The five-year loss ratio record for art theft recorded by the Insurance
Services Office is consistently below 30% in spite of low premiums and rising exposures caused by a robust fine art market.
Insured risks are superior, said Straus, because of stringent risk selection, beefed up security and other risk management
measures.
There are a number of reasons for the high levels of uninsured risks. Some risks are considered uninsurable by the private
sector, notably:
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government-owned institutions that lack the resources or ban insurance altogether;
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archaeological sites where protection is not viable; and
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churches with an open-door policy.
Other uninsured groups include private collectors who are concerned about revealing their assets and paying taxes on them.
Uninsured galleries and museums also can be a cause of concern to private collectors who lend their works and may find they
are not adequately protected.
Under-insurance is a common factor, too, particularly with private collections. Straus cited Britain's alleged biggest theft,
the £80 million (US$148 million) robbery from the Wiltshire manor of Harry Hyams. The cover was a small fraction of the value
of the stolen paintings.
"It is quite clear that the experience of the insurance industry is better than the experience of uninsured fine art," said
Straus. The reasons, she concluded, are manifold:
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underwriters analyze risks through on-site visits and review all aspects of risk management;
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emergency contingency planning;
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background checks on employees;
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rewards and resources devoted to recovery; and
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reduced coverage when loss prevention recommendations are ignored.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,000 independent agents and brokers. Chubb's
global network includes branches and affiliates in North America, Europe, Latin America, Asia and Australia. The company is
noted for its Masterpiece® line of personal insurance products for homes, autos, watercraft and valuable possessions, including
antiques, jewelry, fine arts and other collectibles, as well as personal and excess liability protection. Chubb insures many
of the world's leading collectors of art.
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