Risk Mitigation for Fine Art and Specie Insurers

We discuss why mitigating the risk of gradual damage to art and luxury items is necessary to protect their long-term market value and ensure the continuity of insurance premiums.


Fine art and specie insurers currently cover theft, fire, flood and transit (amongst other risks) but not gradual damage to the object’s condition, since the risk event cannot be correlated to a distinct moment in time [1]. In other words, we do not know when the damage started.

And yet, gradual damage to the object’s condition affects its market value and – since premiums are a function of market value [2] – this risks the continuity of the insurance cover itself.

In the extreme case, severe damage may result in removal of the item from the policy, or may result in losing the client entirely. Under lesser circumstances, the object simply loses market value but so also does the premium.

So, how can art insurers mitigate condition risk when it is largely in the hands of the collector?

Risk Mitigation App

ArtRatio is now piloting an industry-first online app called Dashboard, which helps to mitigate condition risk for art and luxury items, plugging a gap in the USD 5 Billion fine art and specie insurance market.

The app gives a traffic light coded indication of risk (and visibility) as a function of material sensitivity, display glazing, lighting and even the reflectivity of the object. 

This information is shown as a series of dials (much like an automotive dashboard) for each parameter: temperature, humidity, illuminance, (light) exposure, visibility and risk:-


Green indicates low risk; red indicates high risk and all of this depends on the materials selected by the user.

Material Sensitivity

Why the focus on material sensitivity? Well, if you shine 400 Lux on a stone sculpture, this is generally not a problem (unless it has light-sensitive pigments or dyes painted on it). That same level of light however on a silk antiquity will result in colour fading in a matter of days or weeks, because silk is highly sensitive to light.

Not to forget, it is as important to display the objects in photopic visibility (in order to be able to discern colours and details) as it is to ensure their conservation, so the Visibility dial on Dashboard indicates whether enough light is likely to reach the user’s eyes (hence the need to know the reflectivity of the object’s surface).

The Risk dial applies a proprietary algorithm on all the parameters above it, aggregating them into a single number, which can then be compared across items in the collection.

The app thus helps to visualise the risk of long-term gradual damage and protect the long-term market value of a collection, benefiting the objects, the collector and the insurer.

Material Damage and Causes

Some of the materials which are most affected include textiles, leather, works on paper, colour photographs, certain dyes & pigments, as well as gemstones, precious metals and fine wines [3].


The table above shows that even objects exhibited in museums (typically with 50-150 Lux) may show noticeable fading in anything from 7 months. When exhibited in private residences or corporate offices, which may have around 500 Lux, the ‘time to noticeable fade’ decreases to a few weeks. For luxury retail collections, often placed in 1000 Lux, you can see noticeable fading in a matter of days.

The materials mentioned above can suffer variously from cracking, embrittlement, colour fading, structural breakdown, mould growth, warping and in the case of fine wines, changes in odour & taste due to light strike.

The most typical causes of damage include high light levels, light exposure, extreme and rapid fluctuations in temperature and relative humidity, air quality, insects and even electrostatic charge buildup (which can ‘lift off’ friable media such as graphite and charcoal). 

Many of the factors are in fact connected, as we discuss in this article on artworld price traceability.

Typical solutions include avoiding natural light altogether (many museums have no external-facing windows for example), rotating objects into storage periodically and installing window blinds on the building facade, all of which have certain disadvantages. None of these measures are really satisfactory.

Dashboard-Current Solutions

Call To Collaboration 

ArtRatio is looking for collaboration with fine art & specie insurers who would like to sign up for the pilot programme, initially recommending a restricted number of customers to use the ArtRatio Dashboard. 

We recommend monitoring condition risk on collections on a monthly basis and sending this data to the insurer to include alongside the other risk assessment measures normally undertaken.

If the customer registers a consistently low Dashboard risk rating over a sustained period of time, this would indicate proactive conservation measures, protecting the market value of the assets and ensuring business continuity for the insurer.

There is another potential benefit since the hard data could be used to quantify and even enhance the reputation of the collector.

We consider that Dashboard can help to grow a market already worth USD 5 Billion annually based on the estimations below, and we look forward to working with insurers to reducing risk and hopefully rewarding good behaviour with reduced premiums.

After all, there is a precedent already in the automotive market.


If you would like to participate in this pilot, please contact us on the form below to discuss how we can jointly resolve what is currently an uninsurable risk for the fine art and specie insurance sector.


1. “Fine Art and High Finance”, Dr. Claire McAndrew, ISBN 1576603334

2. “Think Your Art Is Adequately Insured?”, Ronald Spencer, artnet.com (2017).

3. “Specification for managing environmental conditions for cultural collections”, British Standards Institute document BSI PAS 198:2012 (now replaced by BS EN 16893:2018).

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