Fine Art Insurance

Restoring Memories

Chubb's fine arts team takes pride in returning a treasured piece of art to a Philadelphia-area family.
By: | April 10, 2017 • 3 min read

The story begins with a man in New Jersey lining up a pool shot. He draws his cue back too far and punches a hole in a painting on his host’s wall.

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The pool shooter, one Robert Grant, owns up to his miscue by buying the painting from his friend. He pays between $50 and $100 for it; the passage of time has obscured the exact amount.

Turns out the painting is an original by Norman Rockwell, who produced more than 300 illustrations for the cover of the Saturday Evening Post back in the first half of the 20th Century.

This painting, one of Rockwell’s earlier works, depicted a farm boy catching a nap against a tree and went by the title “Taking a Break” among others.

The billiards blunder occurred back in the early 1950’s. In 1976, thieves broke into Robert Grant’s Cherry Hill, N.J. home and stole the painting.

Chubb Insurance wrote a policy on the painting though and paid off Robert Grant’s claim, for $15,000. Under the terms of the policy, the title on the painting transferred to the insurer when the claim was paid.

Fran O’Brien, division president, North American Risk Services, Chubb

Decades went by, give or take a few years.  One day, according to the New York Times, Robert Grant’s son John got an introduction to Robert Bazin, a retired FBI agent, who agreed to take up the search for the lost painting.

The elder Grant passed away in 2004. Besides missing their father, the Grant family evidently still felt the loss of a favorite family possession quite keenly.

Bazin contacted the FBI, which put out a press release in 2016, asking for information on the painting’s whereabouts. An art dealer who wishes to remain anonymous contacted the FBI and handed it over.

“The work was in the collection of a dealer who didn’t realize there was an issue with the provenance,” said Laura Doyle, an assistant vice president and North American Collections Management Specialist with Chubb.

“There are often occurrences where we can’t bring it back, but when we are able to, it is an important part of our service.” — Fran O’Brien, division president, North American Risk Services, Chubb

Doyle, a graduate of the University of Richmond, holds a certificate in fine arts appraisal from NYU.

According to Fran O’Brien, division president, North American Risk Services for Chubb, there was a clause in Grant’s insurance policy that allowed for the title for the painting to revert to the Grant family if they agreed to pay back the $15,000 they got for the original claim.

Laura Doyle, assistant vice president and North American Collections Management Specialist, Chubb

Done deal; and so it came to pass that the Grant family reclaimed a painting, once purchased for less than $100 and now worth possibly as much as $1 million.

Chubb in turn, donated the $15,000 to the Norman Rockwell Museum in Stockbridge, Mass.

It’s a great story, and Chubb’s O’Brien said there are some good lessons to be taken from it.

Owners of art collections should consider insuring them with a valuable articles policy, rather than relying on their home owner’s policy, she said.

“Even with modest collections, they should be thinking about a valuable articles policy, whether it’s hundreds of millions or $100,000, it’s important to know that there is a better solution out there,” O’Brien said.

A good fine arts policy solution also includes support from fine arts specialists who can give advice on the safest way to store and display valuable art works.

Keeping a Modigliani above the dining room table might make the owner warm and proud, but probably isn’t the best idea, particularly if it can be seen from the street.

That protection can be as specific as an individual asset alarm for particularly valued pieces. Insurer support can also include advice on confirming the chain of title ownership for a piece that has changed hands a number of times.

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“We advise that collectors request information on provenance, which would detail any prior owners and art galleries or auction houses where the work was sold,” Doyle said.

This fine arts insurance story had a very happy ending, because the Grant family got the painting back. But it often happens that treasured pieces of jewelry or art are never seen again.

“Part of our business is to restore memories,” said Chubb’s O’Brien.

“There are often occurrences where we can’t bring it back, but when we are able to it is an important part of our service,” O’Brien said.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Property

Insurers Take to the Skies

This year’s hurricane season sees the use of drones and other aerial intelligence gathering systems as insurers seek to estimate claims costs.
By: | November 1, 2017 • 6 min read

For Southern communities, current recovery efforts in the wake of Hurricane Harvey will recall the painful devastation of 2005, when Katrina and Wilma struck. But those who look skyward will notice one conspicuous difference this time around: drones.

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Much has changed since Katrina and Wilma, both economically and technologically. The insurance industry evolved as well. Drones and other visual intelligence systems (VIS) are set to play an increasing role in loss assessment, claims handling and underwriting.

Farmers Insurance, which announced in August it launched a fleet of drones to enhance weather-related property damage claim assessment, confirmed it deployed its fleet in the aftermath of Harvey.

“The pent-up demand for drones, particularly from a claims-processing standpoint, has been accumulating for almost two years now,” said George Mathew, CEO of Kespry, Farmers’ drone and aerial intelligence platform provider partner.

“The current wind and hail damage season that we are entering is when many of the insurance carriers are switching from proof of concept work to full production rollout.”

 According to Mathew, Farmers’ fleet focused on wind damage in and around Corpus Christi, Texas, at the time of this writing. “Additional work is already underway in the greater Houston area and will expand in the coming weeks and months,” he added.

No doubt other carriers have fleets in the air. AIG, for example, occupied the forefront of VIS since winning its drone operation license in 2015. It deployed drones to inspections sites in the U.S. and abroad, including stadiums, hotels, office buildings, private homes, construction sites and energy plants.

Claims Response

At present, insurers are primarily using VIS for CAT loss assessment. After a catastrophe, access is often prohibited or impossible. Drones allow access for assessing damage over potentially vast areas in a more cost-effective and time-sensitive manner than sending human inspectors with clipboards and cameras.

“Drones improve risk analysis by providing a more efficient alternative to capturing aerial photos from a sky-view. They allow insurers to rapidly assess the scope of damages and provide access that may not otherwise be available,” explained Chris Luck, national practice leader of Advocacy at JLT Specialty USA.

“The pent-up demand for drones, particularly from a claims-processing standpoint, has been accumulating for almost two years now.” — George Mathew, CEO, Kespry

“In our experience, competitive advantage is gained mostly by claims departments and third-party administrators. Having the capability to provide exact measurements and details from photos taken by drones allows insurers to expedite the claim processing time,” he added.

Indeed, as tech becomes more disruptive, insurers will increasingly seek to take advantage of VIS technologies to help them provide faster, more accurate and more efficient insurance solutions.

Duncan Ellis, U.S. property practice leader, Marsh

One way Farmers is differentiating its drone program is by employing its own FAA-licensed drone operators, who are also Farmers-trained claim representatives.

Keith Daly, E.V.P. and chief claims officer for Farmers Insurance, said when launching the program that this sets Farmers apart from most carriers, who typically engage third-party drone pilots to conduct evaluations.

“In the end, it’s all about the experience for the policyholder who has their claim adjudicated in the most expeditious manner possible,” said Mathew.

“The technology should simply work and just melt away into the background. That’s why we don’t just focus on building an industrial-grade drone, but a complete aerial intelligence platform for — in this case — claims management.”

Insurance Applications

Duncan Ellis, U.S. property practice leader at Marsh, believes that, while currently employed primarily to assess catastrophic damage, VIS will increasingly be employed to inspect standard property damage claims.

However, he admitted that at this stage they are better at identifying binary factors such as the area affected by a peril rather than complex assessments, since VIS cannot look inside structures nor assess their structural integrity.

“If a chemical plant suffers an explosion, it might be difficult to say whether the plant is fully or partially out of operation, for example, which would affect a business interruption claim dramatically.

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“But for simpler assessments, such as identifying how many houses or industrial units have been destroyed by a tornado, or how many rental cars in a lot have suffered hail damage from a storm, a VIS drone could do this easily, and the insurer can calculate its estimated losses from there,” he said.

In addition,VIS possess powerful applications for pre-loss risk assessment and underwriting. The high-end drones used by insurers can capture not just visual images, but mapping heat, moisture or 3D topography, among other variables.

This has clear applications in the assessment and completion of claims, but also in potentially mitigating risk before an event happens, and pricing insurance accordingly.

“VIS and drones will play an increasing underwriting support role as they can help underwriters get a better idea of the risk — a picture tells a thousand words and is so much better than a report,” said Ellis.

VIS images allow underwriters to see risks in real time, and to visually spot risk factors that could get overlooked using traditional checks or even mature visual technologies like satellites. For example, VIS could map thermal hotspots that could signal danger or poor maintenance at a chemical plant.

Chris Luck, national practice leader of Advocacy, JLT Specialty USA

“Risk and underwriting are very natural adjacencies, especially when high risk/high value policies are being underwritten,” said Mathew.

“We are in a transformational moment in insurance where claims processing, risk management and underwriting can be reimagined with entirely new sources of data. The drone just happens to be one of most compelling of those sources.”

Ellis added that drones also could be employed to monitor supplies in the marine, agriculture or oil sectors, for example, to ensure shipments, inventories and supply chains are running uninterrupted.

“However, we’re still mainly seeing insurers using VIS drones for loss assessment and estimates, and it’s not even clear how extensively they are using drones for that purpose at this point,” he noted.

“Insurers are experimenting with this technology, but given that some of the laws around drone use are still developing and restrictions are often placed on using drones [after] a CAT event, the extent to which VIS is being used is not made overly public.”

Drone inspections could raise liability risks of their own, particularly if undertaken in busy spaces in which they could cause human injury.

Privacy issues also are a potential stumbling block, so insurers are dipping their toes into the water carefully.

Risk Improvement

There is no doubt, however, that VIS use will increase among insurers.

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“Although our clients do not have tremendous experience utilizing drones, this technology is beneficial in many ways, from providing security monitoring of their perimeter to loss control inspections of areas that would otherwise require more costly inspections using heavy equipment or climbers,” said Luck.

In other words, drones could help insurance buyers spot weaknesses, mitigate risk and ultimately win more favorable coverage from their insurers.

“Some risks will see pricing and coverage improvements because the information and data provided by drones will put underwriters at ease and reduce uncertainty,” said Ellis.

The flip-side, he noted, is that there will be fewer places to hide for companies with poor risk management that may have been benefiting from underwriters not being able to access the full picture.

Either way, drones will increasingly help insurers differentiate good risks from bad. In time, they may also help insurance buyers differentiate between carriers, too. &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected]