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| Edited By: Aswathy Varughese,Yogini Joglekar |Source: DNA |Updated: Mar 18, 2018, 04:08 AM IST
Indian insurance market is experimenting with the niche concept of art insurance. In the last 5 years, the Indian art market has grown more than 500% in sales. Affluents, young entrepreneurs, who choose art as an investment opportunity, and an upward trend of the Indian art-work collectors are the key drivers of growth for art market.
“Insurance potential lies with art traders with stock value up to Rs 50 crore as it is completely untapped. We feel that only 10-15% of potential in this segment has been tapped yet. We have a comparatively small portfolio, yet a profitable one,” says Rajive Kumaraswami, head-risk and re-insurance, ICICI Lombard GIC Ltd.
“Some estimate that the value of art that can be insured in India totals to about $1 billion. This has an estimated accretion of about 5% per annum. At these levels, we estimate the premium potential of the art insurance market to be about Rs 150-Rs 200 crore overall,” says Gaurav Garg, MD and chief executive officer, Tata AIG, general insurance.
Art insurance generally covers the risk like damage during transit, restoration and framing. There are risks associated with handling the piece of art within the premises of a gallery which can also be covered. It extends covers to natural perils, accidental damages and terrorism damage.
The target customers for the art insurers may be art galleries, art auction houses, art funds, art warehousing service providers and private collectors. Private players like ICICI Lombard, Tata AIG and Bajaj Allianz are the key players in art insurance in India. Profile of the insured, location, security measures and past loss history are some of the underwriting parameters regarding this policy.
“Art insurance is yet to catch up due to the challenge of valuation which may differ among different valuators. As insurers require the exact price of the asset, it usually becomes difficult to ascertain the sum insured applicable. Also, artworks such as paintings of sculptures require high maintenance in terms of the care taken and security, due to which insurers may be reluctant to take on this risk,” says TA Ramalingam, head-underwriting, Bajaj Allianz General Insurance.
