Chelene Kingsley-Wilkins
Nhlanzeko Mngomezulu
Increasingly frequent extreme weather events, such as those seen in South Africa recently, are becoming a global trend which is reflected in the amount of weather-related insurance claims that are being filed by people and businesses.
This is according to Chelene Kingsley-Wilkins, Senior Underwriter for Artinsure at iTOO Special Risks, who says that events such as the recent floods in Cape Town and earlier this year in KwaZulu-Natal are not a unique phenomenon to South Africa.
“The World Economic Forum Global Risks Report 2024 states that current trajectories of global warming mean that at least one ‘climate tipping point’ or the threshold for long-term, potentially irreversible and self-perpetuating change to a planetary system could be passed within the next 10 years. This very well illustrates the increase in the frequency of these events, and not only are we seeing a higher frequency but also severity of claims in terms of the damage that occurs,” says Kingsley-Wilkins.
“Even with a slight increase in the frequency of extreme weather events, such as two or three more incidents compared to the previous year, the severity is evident in the number of items, including artworks, that suffer damage and the extent of that damage.”
In the period beginning January 2020 to date, iTOO has seen an increase in the frequency of adverse weather events, as well as notifications showing that more of its clients are getting affected by these unpredictable weather events.
Artinsure’s split of claims over the past five years shows a steady increase in claims due to flood/rainstorm damage, with 7% in 2020, 24% in 2021, 21% in 2022, 41% in 2023 and 22% to end May 2024. As of the end of May 2024, iTOO received more adverse weather claims in the first five months of the year, than in the full year 2020 and 2022, and not too far behind 2021. This trajectory projects that this year should end at either the same levels as 2024 or slightly higher.
Nhlanzeko Mngomezulu, Claims Manager: Art, Drones, Crisis and Contingency at iTOO Special Risks, explains that with an increasing in the amount of cases, the damage is so severe that it is difficult to restore the insured item to its original condition without incurring huge costs.
“So, as an insurer, we are finding that it costs more to handle such claims and the likelihood of recovering these costs becomes a little slimmer, simply because of the severity of the damage,” he says.
Depending on the material that the artwork is made from, the restoration process can either be relatively straightforward or significantly more complex and intricate, says Mngomezulu. “For example, a sculpture made of bronze, or ceramics would need to be treated for mould and wiped down.
“However, a wooden sculpture will likely suffer water damage during a flood and the full extent of the damage might only become evident over some time. Thus, the restoration process is more complex,” he adds.
Paintings and photographs are most likely to suffer some of the worst water damage and the complexity of their restoration often largely depends on the type of material and medium used, for example, whether they were created on paper or canvas.
While natural disasters and extreme weather events cannot be prevented, there are some measures that owners of artworks can take to safeguard their collectables, says Kingsley-Wilkins. “For example, to avoid flood damage, we would suggest that clients elevate their artworks if they have any standing on the floor.
“Our policy does state that if you have any works in storage, these need to be on racks or pallets at least 10cm above the ground in case of flooding. One of the benefits on our policy is that if there is a warning of a natural disaster or a fire or something coming their way, we will, if notified, arrange for the collection to be removed from the house and put into safekeeping.”
Additionally, collectors should ensure that the buildings or premises where their art collections are being stored are well-maintained to mitigate the risk and the impact of adverse weather events. Before purchasing a property where a collection would be housed, buyers can consult an expert to assess what risks are present.
Mngomezulu notes that when an insured artwork is damaged during an event such as a flood, it is then taken to a specialist restorer who is qualified to restore that particular medium. Different restorers specialise in materials such as paper, canvas or sculptures, among others.
“Once the artwork is removed from the premises and sent to the appropriate restorer for assessment, a damage report is generated and a restoration process would be outlined on what needs to be done to get it back to its original state,” he says.
“Once the restoration is done, we would have it re-evaluated and if there was any depreciation on it, the policy would respond to have the loss in value settled. With our private collector policy, the client has the option to declare the item a total loss or to restore it.”
With extreme weather events becoming increasingly frequent and destructive, art collectors should be proactive in protecting their collections. In light of current trends, art owners should not think in terms of if an adverse event occurs, but rather when.
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