Insurance companies are entering the least-explored domain of fine arts insurance. Iffco Tokio General Insurance (ITGI) is coming up with two new products in the niche area, particularly for vintage cars, and another one for musical instruments. Premiums on these products may not be uniform and would depend on clients and valuations of the assets.
“The demand for vintage car insurance is high and we expect it to add 10 per cent to the fine arts insurance business in the first year of launch and musical instruments to contribute 5 per cent,” said Vikas Singh, head of finance and liability, Iffco Tokio.
The products will be launched in the next one year. Currently, Iffco Tokio has two products in this segment, namely fine art insurance for private collectors and fine art insurance for art dealers and gallery owners.
The insurer has received a premium income as high as Rs 15,00,000 from a gallery as well as a private collector. ITGI has sold 100 policies in the last two years, including eight to 10 large clients, which contributed over 60 per cent in the premium income of fine arts insurance. It has settled four claims so far. With more awareness and people turning more vigilant about their possessions, the company aims at selling 500 policies in the next five years.
An executive from another insurance company said premiums vary from 0.25 per cent to 0.4 per cent of the art work. A higher premium is charged if the security provisions are not up to date.
However, the fine arts insurance contributes only a fraction of the gross premium income. But the insurer is confident of growing at 10 per cent per annum.
“There is opportunity for fine arts insurance business in India, China and Eastern Europe. These countries are culturally rich and have created a large amount of wealth” said Robert Read of Hiscox Global Markets. ITGI has a treaty arrangement with underwriter Hiscox of the United Kingdom for providing risk cover in different segments. The underwriter has clients worldwide, including the National Gallery of London and museums in the United States.
Today, the Indian art market is valued at Rs 20,000 crore and is expected to grow at 20-25 per cent annually. The valuations of the arts have come down by 10-15 per cent from the last year’s, the official added.
Recently, Bajaj Capital’s insurance broking has forayed into fine arts insurance. ICICI Lombard and Oriental Insurance are the other players in this segment.
