the differences in valuation are a cause of concern
the determination of value is subjective
Gemeentemuseum The Hague
Top Collection: 400,000 visitors a year € 425,000 insurance premium in 2009
A short term consensus result, at non insurance in case of total loss or theft, is unrealistic
Necessary to concentrate on other methods of reducing insurance premiums, based on shared liability or own cleverness.
Possibilities to reduce costs of insurance premiums
Stop insuring depreciation
Stop insuring the risk against terrorism and war
Stop evaluating the object as high as possible
Put out to tender at top collection exhibitions
If the borrower pays for insurance, let it happens against normal, financial conditions, not against immense profit
Are there more possibilities in saving insuring premiums ???
Introduce a European-wide state indemnity scheme based on a standard cover
Content of Insurance Covers 25% Incl. TERRORISM 35% TRANSPORT RETURN 25% Incl. TERRORISM 35% STAY 25% Incl. TERRORISM 35% TRANSPORT THEFT TOTAL LOSS DEPRECIATION DAMAGE
object is unique; it is impossible to replace this object
after restoration, the object is in the best possible condition
there is no reason to suppose that a restored object has a less artistic or cultural value
the premium will decrease 35%
Stop insuring depreciation
Insuring against Terrorism and War
The premium of covering against terrorism and war adds up to 40% of the total premium.
The chances of terrorism and war are minimal (war doesn’t come overnight)
As long as this part of the premium is sky-high, don’t insure this risk
insuring against the risk of Terrorism and War is not necessary
Value of the object
Permillage per euro
For example insurance cover Gemeentemuseum The Hague, object valued at € 20,000,000 originated from a European museum, exhibition stays 3 month:
Transport : 2 x 0.15 o/oo x € 20,000,000 = € 6,000
Stay : 3 x 0.075 o/oo x € 20,000,000 = € 4,500
The value of objects
I would be preferable to evaluate objects as low as possible and not as high as possible.
Nude Green Leaves, and Blust : Picasso € 81,000,000 Reaction of a curator: “our” Picasso has more quality, the market price is higher than it was last week, also the new value is going up with € 20,000,000 .
Invite more brokers to tender
This produces substantial differences in premiums
Example:Total value of the exhibition € 500,000,000
Broker a. € 145,000
Broker b. € 125,000
Broker c. € 160,000
The borrower pays always the bill, but this can be in a different way
It concerns a painting
The value is € 20,000,000
From a European museum
The exhibition lasts three months
Borrower’s broker: € 10,500
(2 x 0.15 o/oo + 3 x 0.075 0/00) x € 20,000,000
Lender’s broker: € 17,600
(2 x 0.2 o/oo + 3 x 0.16 0/00) x € 20,000,000
Borrower vs. lender
The leading principle for insurance would be:
Best quality of the insurance cover vs. the best price for the borrower
The lender is responsible for the content of the insurance cover
The borrower is responsible for the contract with the broker; no “profitable” influences
Special Insurance cover for outgoing loans
Gemeentemuseum’s special cover for outgoing loans
A special cover with our broker
Same conditions for outgoing and incoming loans
The borrower of our objects has to pay the very lowest price for this insurance (without profitable permillages)
No discussion about the insurance cover
More possibilities to save insurance premiums
What will be the reason to insure the whole value of an exhibition during transport; are all the object at the same time “on the road” ??
Is it necessary to insure the whole value of the exhibition ??
State indemnity helps to reduce insurance costs substantially
Differences in coverages make it difficult for lenders to accept the state indemnity of all the different countries
It would be helpful if:
There would be only one state indemnity scheme in Europe
The museums develope a fixed cover for this indemnity
The State indemnity covers the whole value of the exhibition.
Museums in Europe can reduce insurance costs
They don’t need direct help from others
But: museum management at both sides (lender and borrower) would have to do this with a collective policy; shared liability.