Published on
09 September 2024
Art has long since captured history’s greatest social movements. As the world invests brainpower, money and time to understand and incorporate sustainability practices into all areas of business and life, the world of contemporary art has questioned their implications on society and our environment. The fluidity of these trends means that everyone involved, particularly insurers, must be astute to the needs of artists, collectors, and galleries, ensuring that we understand the impacts these trends can have on risk management and transfer.
Digital art experiences
This year, virtual or digital art experiences leveraging new technologies are becoming increasingly common. At this year’s Art Basel[1] we saw a new satellite fair called the digital Art Mile, fully dedicated to digital art. While transforming the ways in which the public can view and interact with art, it is also reducing carbon footprints by eliminating the need for shipping physical artwork around the world for temporary exhibitions. This cuts transportation emissions and waste from single-use packaging and crating. It also brings works to a much broader audience, who might otherwise struggle to travel to or access exhibitions.
While advancements in virtual reality, 3D modelling, and interactive digital experiences provide an engaging alternative for museums and visitors, insurance providers would need to contemplate potential cyber risks involved with digitising high-value artwork.
Earlier this year, a prominent museum software provider, fell victim to a ransomware attack on systems that supported over 800 clients globally. The incident left a trail of disrupted online collections and potentially compromised sensitive information, sparking a conversation around the need to secure digital art assets. With cyber-attacks have becoming more prominent, the challenge for insurers is to adapt policies for emerging cyber threats to protect museums and their public from these risks, without stilting the adoption of new technologies.
Transportation
Despite advancements in technology, nothing can truly replicate the experience of seeing artwork in person, and insurers and art logistics companies are working out how to transport art in a way which minimises the environmental impact while ensuring utmost care and security.
For artwork that must be physically transported, the industry should transition to reusable, circular shipping containers rather than single-use wooden crates that are often discarded after use. Not only would this reduce material waste, but insurance providers could confidently cover shipments using recertified reusable containers that meet professional packaging standards. A more circular model for art shipping is an easy win for sustainability.
Rethinking climate controls
Climate control requirements are currently imposed on many art storage facilities and museums. Maintaining narrow temperature and humidity ranges can be incredibly energy-intensive, especially for older buildings. When looking to unlock significant energy savings for art-holding institutions, insurance providers could re-evaluate acceptable ranges, allowing more flexibility and variation if it does not risk irreparable damage to artworks.
Similarly, heritage museums face the challenge of retrofitting historic buildings to meet modern sustainability standards without compromising architectural integrity or artwork preservation. London's National Gallery, housed in a 19th century building, undertook a £35 million project to install energy-efficient lighting, climate control systems, and renewable energy sources, reducing its carbon footprint while safeguarding its priceless art collection.
Ethical governance and provenance
The illicit trade of stolen and looted artworks also persists as a significant issue. In 2019, the FBI recovered over 500 cultural objects worth millions, highlighting the need for robust provenance verification measures. Insurers have implemented rigorous due diligence processes and collaborate with law enforcement agencies to combat the trade of illicit cultural property.
Insurance plays a crucial governance role as a gatekeeper preventing unethical and illegal practices like money laundering, stolen art trafficking, and the destructive looting of cultural heritage sites. Underwriters aim to catch any red flags and deny coverage for artworks with questionable provenance. However, this is complicated when it comes to major institutions that built their collections in eras when cultural acquisition practices were very different from today's standards. Insurers must thoughtfully navigate how to uphold ethical principles and their mission to help protect the world’s cultural heritage as one critical element in the risk management strategy.
Increasing diversity of perspectives
The art and insurance industries need a diverse range of perspectives and voices, across gender, race, disability and life experience, and geographic diversity, to be involved in examining sustainable practices and developing solutions. The art market was and remains an early mover in the discussion and promotion of diversity and inclusion. Liberty is aware that underwriters based in different regions face unique cultural contexts and considerations. By bringing in team members from across the world, we can shed new light on ethical risks, representation gaps, and opportunities for positive industry transformation.
As outlined, tackling ever-changing issues like environmental impact, ethical governance, and equitable representation is no easy feat for artworld incumbents but insurance providers have an opportunity to be catalytic voices ushering in more sustainable, ethical, and inclusive practices.
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Authors
David Saillen
Zurich