Insurance, non insurance and state indemnity
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Insurance, non insurance and state indemnity

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Insurance, non insurance and state indemnity Insurance, non insurance and state indemnity Presentation Transcript

  • Insurance, Non Insurance/shared liability & State Indemnity
    • Collection Mobility 2.0
    • Madrid, 31 May – 1 June 2010
    • Hans Buurman
    • Deputy Director Gemeentemuseum The Hague
  • Flabbergasted…. Object 1. Object 2. Object 3. Object 4. Object 5. Curator € 350,000 € 1,000,000 € 2,200,000 € 200,000 € 12,000,000 Auctioneer A. € 50,000 € 500,000 € 800,000 € 200,000 € 25,000000 Auctioneer B. € 500,000 € 500,000 € 700,000 € 1,000,000 € 15,000,000
  • Value of Objects
    • 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
  • Non Insurance
    • 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
  • Insuring depreciation
    • 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
  • Insurance Premium
    • 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
    • Dutch indemnity
    • 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
    • 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.
  • Conclusions
    • 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.
    • Let us aim to reduce insurance costs!