French art treasure heist proves amazing inadequate security & protection… a warning for South Africans

24 May 2010 Artinsure

Major Art Theft in France on Thursday 20th May to exceed R1bn

Major French heist is a warning to South Africans who are security conscious but “lack understanding of the needs to adequately secure and protect treasures, says South African art and insurance expert.

Yesterday’s theft of five paintings possibly worth over R1 billion, including major works by Picasso and Matisse, in a brazen overnight heist by a lone thief at the Paris Museum of Modern Art proves again that most collections are not appropriately secured or insured.

South African art expert and MD of Artinsure Gordon Massie says while theft on this scale is unusual, its impact is significant. “We are seeing an increasing incidence of loss from publicly accessible collections in museums, galleries, institutions and corporate collections in South Africa. Many of these works of art are irreplaceable, but the collector or museum can be financially compensated if the art is appropriately insured.”

“However, many of the owners of these items will not be able to recover their losses in view of the limitations under their existing standard insurance coverage,” said Massie.

There is currently a variance in reported values between the market value at auction of US600m and the predicted insured value of US100m.

“This is a common problem and one that is not addressed or recognised until there is a loss,” he says.

Art is an alternative investment in South Africa and the values are increasing dramatically. Investors have sought the financial security of art and collectables during the economic crisis, but have not always considered the impact of theft or damage to these pieces.

South Africans are keenly security conscious, ensuring that their valuables are secured and take out necessary insurance. However, when it comes to the specialised world of art and collectables, there is a distinct lack of understanding of the needs and cover available for these items.

“Normal insurance policies have theft limitations which will not respond appropriately,” said Massie.

“Most policies will not respond to the value of an appreciating asset such as art. Specialist skills are necessary. Art and collectable claims are not standard asset claims. In addition to our expertise and the experience needed in resolving art claims, you need to have access to trained specialist adjusters, restorers and recovery agents. We work with all of these and also call on an international network of investigators in Interpol, FBI, Scotland Yard, Art Loss Register and Trace.

According to Massie, there are other consequences to theft for the unsuspecting investor – that of lack of title.

“This is more common than one might expect. Even if a person unknowingly buys a previously stolen work of art, they have to return it to the original owner,” said Massie.

In view of the fact that South African art sales are soaring and achieving record prices, it is clear that South African investors need to access and protect their assets adequately. Risk is not all about theft - specialist cover is needed.

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