Fine art represents only 10% of Lloyd’s wildfire loss: Tiernan

By Scott Vincent

March 19 - (The Insurer) - Lloyd’s has seen a lower fine art loss than expected from January’s LA wildfires, chief of markets Patrick Tiernan told The Insurer TV.

Tiernan said fine art losses represent around 10% of Lloyd’s preliminary $2.3 billion net loss estimate for the wildfires, with marine cargo representing an additional 5%. Property represents 85% of the $2.3bn total.

“People were taking preventative action. There was a bit of notice on the wildfires. One Lloyd’s syndicate, Wildfire Defence Services, were on the ground on the Saturday [January 4], and the first ignition wasn’t until the Monday, so there was time to take some action.

“You can't take everything with you, but I think some people took some action that mitigated the loss. So, we don't see it as being a big part of the final number.”

One of the major concerns in the immediate aftermath of the wildfire was the scale of the fine art loss, which market sources put in the $3 billion to $5 billion range, with significant exposure expected at Lloyd’s.

Hiscox, one of the largest players in the Lloyd’s/London fine art market, has already played down its expected losses in the class.

During the group’s full-year earnings call, chief underwriting officer Jo Musselle said the London-listed carrier had not seen any material art losses related to the wildfires.

In contrast, Markel CFO Brian Constanzo said during the group’s Q4 earnings call that the most impacted product lines within its $90 million to $130 million estimate sat within its international fine art and specie book.

Convex executive chairman Stephen Catlin warned there was still potential for fine art losses from the wildfires to be substantial.

“It’s not uncommon in those wealthy areas in LA for the property to be worth maybe 10% of the contents. It’s not clear how much of that contents was insured and it’s not clear where it’s been insured,” he told last week’s Bermuda Risk Summit.