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.”


“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.”


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.


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

Risk Report: Marine

Crewless Ships Raise Questions

Is a remote operator legally a master? New technology confounds old terms.
By: | March 5, 2018 • 6 min read

For many developers, the accelerating development of remote-controlled and autonomous ships represents what could be the dawn of a new era. For underwriters and brokers, however, such vessels could represent the end of thousands of years of maritime law and risk management.

Rod Johnson, director of marine risk management, RSA Global Risk

While crewless vessels have yet to breach commercial service, there are active testing programs. Most brokers and underwriters expect small-scale commercial operations to be feasible in a few years, but that outlook only considers technical feasibility. How such operations will be insured remains unclear.

“I have been giving this a great deal of thought, this sits on my desk every day,” said Rod Johnson, director of marine risk management, RSA Global Risk, a major UK underwriter. Johnson sits on the loss-prevention committee of the International Union of Maritime Insurers.

“The agreed uncertainty that underpins marine insurance is falling away, but we are pretending that it isn’t. The contractual framework is being made less relevant all the time.”

Defining Autonomous Vessels

Two types of crewless vessels are being contemplated. First up is a drone with no one on board but actively controlled by a human at a remote command post on land or even on another vessel.

While some debate whether the controllers of drone aircrafts are pilots or operators, the very real question yet to be addressed is if a vessel controller is legally a “master” under maritime law.


The other type of crewless vessel would be completely autonomous, with the onboard systems making decisions about navigation, weather and operations.

Advocates tout the benefits of larger cargo capacity without crew spaces, including radically different hull designs without decks people can walk on. Doubters note a crew can fix things at sea while a ship cannot.

Rolls-Royce is one of the major proponents and designers. The company tested a remote-controlled tug in Copenhagen in June 2017.

“We think the initial early adopters will be vessels operating on fixed routes within coastal waters under the jurisdiction of flag states,” the company said.

“We expect to see the first autonomous vessel in commercial operation by the end of the decade. Further out, around 2025, we expect autonomous vessels to operate further from shore — perhaps coastal cargo ships. For ocean-going vessels to be autonomous, it will require a change in international regulations, so this will take longer.”

Once autonomous ships are a reality, “the entire current legal framework for maritime law and insurance is done,” said Johnson. “The master has not been replaced; he is just gone. Commodity ships (bulk carriers) would be most amenable to that technology. I’m not overly bothered by fully automated ships, but I am extremely bothered by heavily automated ones.”

He cited two risks specifically: hacking and fire.

“We expect to see the first autonomous vessel in commercial operation by the end of the decade. Further out, around 2025, we expect autonomous vessels to operate further from shore — perhaps coastal cargo ships. For ocean-going vessels to be autonomous, it will require a change in international regulations, so this will take longer.” — Rolls-Royce Holdings study

Andrew Kinsey, senior marine risk consultant, Allianz Global Corporate & Specialty, asked an even more existential question: “From an insurance standpoint, are we even still talking about a vessel as it is under law? Starting with the legal framework, the duty of a flag state is ‘manning of ships.’ What about the duty to render assistance? There cannot be insurance coverage of an illegal contract.”

Several sources noted that the technological development of crewless ships, while impressive, seems to be a solution in search of a problem. There is no known need in the market; no shippers, operators, owners or mariners advocate that crewless ships will solve their problems.

Kinsey takes umbrage at the suggestion that promotional material on crewless vessels cherry picks his company’s data, which found 75 percent to 90 percent of marine losses are caused by human error.


“Removing the humans from the vessels does not eliminate the human error. It just moves the human error from the helm to the coder. The reports on development by the companies with a vested interest [in crewless vessels] tend to read a lot like advertisements. The pressure for this is not coming from the end users.”

To be sure, Kinsey is a proponent of automation and technology when applied prudently, believing automation can make strides in areas of the supply chains. Much of the talk about automation is trying to bury the serious shortage of qualified crews. It also overshadows the very real potential for blockchain technology to overhaul the backend of marine insurance.

As a marine surveyor, Kinsey said he can go down to the wharf, inspect cranes, vessels and securements, and supervise loading and unloading — but he can’t inspect computer code or cyber security.

New Times, New Risks

In all fairness, insurance language has changed since the 17th century, especially as technology races ahead in the 21st.

“If you read any hull form, it’s practically Shakespearean,” said Stephen J. Harris, senior vice president of marine protection UK, Marsh. “The language is no longer fit for purpose. Our concern specifically to this topic is that the antiquated language talks about crew being on board. If they are not on board, do they still legally count as crew?”

Harris further questioned, “Under hull insurance, and provided that the ship owner has acted diligently, cover is extended to negligence of the master or crew. Does that still apply if the captain is not on board but sitting at a desk in an office?”

Andrew Kinsey, senior marine risk consultant, Allianz Global Corporate & Specialty

Several sources noted that a few international organizations, notably the Comite Maritime International and the International Maritime Organization, “have been very active in asking the legal profession around the world about their thoughts. The interpretations vary greatly. The legal complications of crewless vessels are actually more complicated than the technology.”

For example, if the operational, insurance and regulatory entities in two countries agree on the voyage of a crewless vessel across the ocean, a mishap or storm could drive the vessel into port or on shore of a third country that does not recognize those agreements.

“What worries insurers is legal uncertainty,” said Harris.

“If an operator did everything fine but a system went down, then most likely the designer would be responsible. But even if a designer explicitly accepted responsibility, what matters would be the flag state’s law in international waters and the local state’s law in territorial waters.


“We see the way ahead for this technology as local and short-sea operations. The law has to catch up with the technology, and it is showing no signs of doing so.”

Thomas M. Boudreau, head of specialty insurance, The Hartford, suggested that remote ferry operations could be the most appropriate use: “They travel fixed routes, all within one country’s waters.”

There could also be environmental and operational benefits from using battery power rather than conventional fuels.

“In terms of underwriting, the burden would shift to the manufacturer and designer of the operating systems,” Boudreau added.

It may just be, he suggested, that crewless ships are merely replacing old risks with new ones. Crews can deal with small repairs, fires or leaks at sea, but small conditions such as those can go unchecked and endanger the whole ship and cargo.

“The cyber risk is also concerning. The vessel may be safe from physical piracy, but what about hacking?” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]