I recently spoke with a banker from a firm that is very active in art financing; I’ve always thought the bank would have enough skin in the game to be concerned about theft. Accordingly, they would encourage their clients to adopt a more aggressive approach to protecting their collections, especially when the works still hanging in their homes are being leveraged. I reminded him that the big art lenders (banks) have been paying lip service to risk mitigation for as long as we’ve been acquainted, but I saw no demonstrative moves to adopt a holistic approach to their client relationships.
His answer might not surprise you, especially if you’re an insurer. As long as the pieces are adequately insured, he really had no concerns. In his view, if the artwork is stolen, he remains whole.
Insurers rightly squirm at the mention of this situation, because they have little recourse. In a highly competitive underwriting market, where client retention often comes down to pricing, the insurer is left holding the bag on a loss. Nonetheless, the insurer cannot mandate the collector take protective measures.
When this issue of competitive pricing is the bottom line, it casts a shadow on the concerns of anyone involved in the market. It suggests that the loss of a valuable piece of art is purely a financial issue.
Yet we know this is not the case. Artworks are inspired and invaluable creations. Why do we act in a way that makes owning, displaying and insuring art a purely monetary transaction?
Any art professional who comes in contact with a collector, gallery, or museum must be mindful of the full implication of a loss resulting from lack of care. She or he must bring that to the collector’s or institution’s attention. Otherwise, the art world would appear to be a front-end game where the sum total is buying and selling. If that is not the case, then everyone should be concerned with risk management and mitigating loss, regardless of their functional role in the sector.