2017 Power Broker

Fine Arts

Making It Easy

Kristina Marcigliano
Senior Account Executive
DeWitt Stern, New York

Susan Jaffe, director of Guernsey’s auction house, may deal with a $10 million collection of guitars one day or a $25 million glass piece by Picasso or rare star rubies on other days.

Regardless of the type of valuable — or its storage and transportation needs — she counts on Kristina Marcigliano to give her the best advice and procure the best coverage.

“We are constantly hitting her with quite a range of needs and she’s always been very responsive,” said Jaffe. “Each collection that we handle has a different set of requirements.”

Marcigliano helped another auction house combine insurance programs during a merger to ensure there were no gaps. In the end, she secured higher limits at a lower premium for the merged company, and developed a jewelry insurance solution for consigned items. A director at the company praised Marcigliano and her colleagues for making the “process smooth and easy. There was no hassle.”

Marcigliano makes “the crazy insurance world a lot simpler than it actually is.”

Auction houses have many complex issues dealing with valuation, security and transport, said Kenneth McKenna, executive vice president and CFO of Doyle Auction House.

“We are not exactly your typical situation,” he said. “Kristina is very creative.”

This year, she created a hybrid policy that covers fine art items, furniture, jewelry and precious metals, including very high transit limits for jewelry coverage that allows the auction house more flexibility when pieces have to be transported.

Overcoming Challenges

Lynn Marcin
Senior Vice President
Aon, Washington, D.C.

In negotiating lender loan agreements, galleries have a mounting problem with “absolute liability creeping into contracts [regardless of insurance coverage],” said Joan Elisabeth Reid, chief registrar of Walters Art Museum. “It’s a major issue.”

Lynn Marcin at Aon subsidiary Huntington T. Block provided the museum with the contract language needed to successfully negotiate a very complex exhibition. “She’s there for everything we need.” said Reid.

“Some lenders make outlandish requests now, and Lynn works so hard to figure out what is a viable request and what we should absolutely not agree to,” said Patty Decoster, head of collections management and registration at Kimbell Art Museum. “[Marcin] is really good at knowing when a line can be crossed and when we should not agree to it, at getting everything she can for the lender from the underwriter but fabulous at protecting the Kimbell from going too far.”

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“When you are trying to wrangle 50 lenders and shipping venues, and determine coverage needs in transit and on premises, and transit to the next institution, it can be nerve-wracking,” said Melanie Harwood, senior registrar at the Baltimore Museum of Art. “Lynn is good at being calm and saying, ‘This is what you can do,’ “ and coming up with the best solution possible.

“We do nothing but give her challenges. That’s our job and she fields them very well,” Harwood said.

A Mentor to the Art World

Deborah Peak
Vice President
Aon, Washington, D.C.

Because of its active lending program to museums in the United States and around the world, the Nelson-Atkins Museum of Art depends on Deborah Peak at Aon subsidiary Huntington T. Block to review the various foreign insurance policies and foreign government indemnity contracts.

It’s a complicated process, especially when the museum deals with different museums in different countries on different projects — all at the same time.

“That can be a little tricky,” said Julie Mattsson, exhibitions registrar at the museum. “Debby has been able to help make that more seamless than it certainly started out to be.”

And not that Mattsson ever forgets when international policy premiums are due, but Peak is always on top of it, and offers to expedite the process at the last minute, she said.

“Sometimes premium costs are pretty high so people don’t want to pay super early, but that means pretty often we get down to the wire,” Mattsson said.

Susan Leidy, deputy director of the Chrysler Museum of Art, said Peak “has been a mentor to many of us. She is absolutely phenomenal. She’s worked with major museums all over the world and she brings that experience to us.

“She’s not prescriptive. She doesn’t say, ‘You have to do this.’ She has a way of educating the client to do the right thing because it benefits everybody. She’s been doing this for a long time in a very low key, solid and professional way. Sometimes that doesn’t get recognized and it should get recognized.”

A Home Run Every Time

Mary Pontillo
Vice President
DeWitt Stern, Charlottesville, Va.

Paris Photo, a prestigious photography collection, was one of the many cultural events that were ordered closed following the terrorist attacks in Paris last year.

Knowing her fine arts clients could one day face a similar situation, Mary Pontillo worked with London to develop event cancellation expense coverage. It’s just one of the ways she works for her clients to expand coverage and stay competitive.

“We have unique art insurance requirements that are not what most people in the world have,” said Sharon Ullman, COO of the Robert Rauschenberg Foundation, who praised Pontillo’s work. Whether it’s shipping 67 containers of artwork to China or protecting a $35 million 191-panel artwork, Pontillo “made sure we were covered from here to there. We just call and say, ‘Here’s a new one for you.’ She makes it easy.”

Arlie Sulka, owner of Lillian Nassau LLC, renowned specialists in original Tiffany Studios lamps, said, “When you get good coverage from someone who is so knowledgeable about the industry and that you trust that much, you just don’t want to let that relationship go. Mary hits a home run every time.”

Added a gallery director, “Mary Pontillo is remarkable and she invested a considerable amount of time going through every page of [our] policy.”

“It’s the driest of subjects but she is very passionate about it,” she said, “And she is passionate about fine arts. That allows her to stand out in the industry.”

Always Available

Anne Rappa
Senior Vice President
Aon, New York

Anne Rappa at Aon subsidiary Huntington T. Block “is always available for my weird questions,” said Bianca Cabrera, registrar at Galerie Lelong.

Fine art insurance is complicated because pieces are “literally moving all over, all of the time, so we always need quick information,” she said. “She’s always willing to talk me through scenarios when we are not quite sure how things may play out.”

Recently, one of the artists associated with the gallery called in a panic because it was the night before the artist had to ship artwork created on a major public commission, and the contract-required insurance had never been procured, she said.

“Anne helped me set that up in a few hours to make sure that the piece was covered,” Cabrera said. “It was a huge, monumental piece, and it wasn’t a little amount of coverage we needed.”

Rappa recently authored a roadmap to help educate university risk managers about the complications involved in identifying, valuing and protecting their fine art and rare book collections. Angela Moss, director, office of risk management at Wayne State University, took advantage of that guidance.

“We never had a fine art policy before,” Moss said. “If we would have had a loss over $10,000, we would have suffered the loss.” The policy covers high-value items without needing to list each one or get appraisals. “Anne is a partner,” she said.

Making a Difference

Casey Wigglesworth
Account Executive
Aon, Washington, D.C.

When doing a $25 million upgrade to a museum, a public sector risk manager realized there were major coverage gaps at an associated facility owned by the public entity but operated by a nonprofit organization.

A dispute over which group was responsible to cover the historic artifacts and other items could not be resolved until Casey Wigglesworth at Aon subsidiary Huntington T. Block came on the scene. She worked with both groups to ensure proper valuation of items and policies to protect them.

“The result was she was able not only to get all parties to work together, which had never worked together, but she was also able to clearly see what each party had to do to get the right cover,” said the public sector risk manager.

Kelsa Coker, treasurer and general manager of Ely Inc., a service provider to museums and galleries, said Wigglesworth is “very responsive to my crazy requests. We are a small business and I look for responsiveness. I need someone to respond almost immediately so I can take care of clients who can be quite needy at times.”

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Regardless of the time or request, Wigglesworth “is just there for me and makes me feel comfortable with what I am offering to my clients. She gives me piece of mind.”

“Casey takes us through what needs to be done to make sure we are properly insured,” said Marilyn Sohi, head registrar, permanent collection, Madison Museum of Contemporary Art, including being available for questions about security, valuation, shipping and storage.

Finalists:

Blythe Hogan
Director, Global Fine Art Practice
Aon, Atlanta

Emily Weiss
Senior Account Executive
DeWitt Stern, New York

 

More from Risk & Insurance

More from Risk & Insurance

2017 RIMS

Resilience in Face of Cyber

New cyber model platforms will help insurers better manage aggregation risk within their books of business.
By: | April 26, 2017 • 3 min read

As insurers become increasingly concerned about the aggregation of cyber risk exposures in their portfolios, new tools are being developed to help them better assess and manage those exposures.

One of those tools, a comprehensive cyber risk modeling application for the insurance and reinsurance markets, was announced on April 24 by AIR Worldwide.

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Last year at RIMS, AIR announced the release of the industry’s first open source deterministic cyber risk scenario, subsequently releasing a series of scenarios throughout the year, and offering the service to insurers on a consulting basis.

Its latest release, ARC– Analytics of Risk from Cyber — continues that work by offering the modeling platform for license to insurance clients for internal use rather than on a consulting basis. ARC is separate from AIR’s Touchstone platform, allowing for more flexibility in the rapidly changing cyber environment.

ARC allows insurers to get a better picture of their exposures across an entire book of business, with the help of a comprehensive industry exposure database that combines data from multiple public and commercial sources.

Scott Stransky, assistant vice president and principal scientist, AIR Worldwide

The recent attacks on Dyn and Amazon Web Services (AWS) provide perfect examples of how the ARC platform can be used to enhance the industry’s resilience, said Scott Stransky, assistant vice president and principal scientist for AIR Worldwide.

Stransky noted that insurers don’t necessarily have visibility into which of their insureds use Dyn, Amazon Web Services, Rackspace, or other common internet services providers.

In the Dyn and AWS events, there was little insured loss because the downtime fell largely just under policy waiting periods.

But,” said Stransky, “it got our clients thinking, well it happened for a few hours – could it happen for longer? And what does that do to us if it does? … This is really where our model can be very helpful.”

The purpose of having this model is to make the world more resilient … that’s really the goal.” Scott Stransky, assistant vice president and principal scientist, AIR Worldwide

AIR has run the Dyn incident through its model, with the parameters of a single day of downtime impacting the Fortune 1000. Then it did the same with the AWS event.

When we run Fortune 1000 for Dyn for one day, we get a half a billion dollars of loss,” said Stransky. “Taking it one step further – we’ve run the same exercise for AWS for one day, through the Fortune 1000 only, and the losses are about $3 billion.”

So once you expand it out to millions of businesses, the losses would be much higher,” he added.

The ARC platform allows insurers to assess cyber exposures including “silent cyber,” across the spectrum of business, be it D&O, E&O, general liability or property. There are 18 scenarios that can be modeled, with the capability to adjust variables broadly for a better handle on events of varying severity and scope.

Looking ahead, AIR is taking a closer look at what Stransky calls “silent silent cyber,” the complex indirect and difficult to assess or insure potential impacts of any given cyber event.

Stransky cites the 2014 hack of the National Weather Service website as an example. For several days after the hack, no satellite weather imagery was available to be fed into weather models.

Imagine there was a hurricane happening during the time there was no weather service imagery,” he said. “[So] the models wouldn’t have been as accurate; people wouldn’t have had as much advance warning; they wouldn’t have evacuated as quickly or boarded up their homes.”

It’s possible that the losses would be significantly higher in such a scenario, but there would be no way to quantify how much of it could be attributed to the cyber attack and how much was strictly the result of the hurricane itself.

It’s very, very indirect,” said Stransky, citing the recent hack of the Dallas tornado sirens as another example. Not only did the situation jam up the 911 system, potentially exacerbating any number of crisis events, but such a false alarm could lead to increased losses in the future.

The next time if there’s a real tornado, people make think, ‘Oh, its just some hack,’ ” he said. “So if there’s a real tornado, who knows what’s going to happen.”

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Modeling for “silent silent cyber” remains elusive. But platforms like ARC are a step in the right direction for ensuring the continued health and strength of the insurance industry in the face of the ever-changing specter of cyber exposure.

Because we have this model, insurers are now able to manage the risks better, to be more resilient against cyber attacks, to really understand their portfolios,” said Stransky. “So when it does happen, they’ll be able to respond, they’ll be able to pay out the claims properly, they’ll be prepared.

The purpose of having this model is to make the world more resilient … that’s really the goal.”

Additional stories from RIMS 2017:

Blockchain Pros and Cons

If barriers to implementation are brought down, blockchain offers potential for financial institutions.

Embrace the Internet of Things

Risk managers can use IoT for data analytics and other risk mitigation needs, but connected devices also offer a multitude of exposures.

Feeling Unprepared to Deal With Risks

Damage to brand and reputation ranked as the top risk concern of risk managers throughout the world.

Reviewing Medical Marijuana Claims

Liberty Mutual appears to be the first carrier to create a workflow process for evaluating medical marijuana expense reimbursement requests.

Cyber Threat Will Get More Difficult

Companies should focus on response, resiliency and recovery when it comes to cyber risks.

RIMS Conference Held in Birthplace of Insurance in US

Carriers continue their vital role of helping insureds mitigate risks and promote safety.

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]