Salvator Mundi, da Vinci and Insurance Capacity
This week saw the record broken for the highest auction price for any work of art. “Salvator Mundi” (Saviour of the World) by Leonardo da Vinci was sold in Christies for $450M. The previous record for a painting sold at auction was Pablo Picasso’s Les Femmes d’Alger (Women of Algiers), which went for $179M in 2015.
It has always been argued that fine art has a low correlation to equity markets and that purchasing fine art as an investment diversifies an individual’s portfolio. Sales in fine art in 2016 reached $56.6bn although this is a drop of about 11% on 2015, the values traded are still vast.
The masterpiece could be seen on exhibition recently in Christie’s London showroom. This could never have happened without the cover that the London market was able to provide for the work.
Insurance capacity is needed for these vast sums of high value fine art and Lloyd’s of London is one of the world’s leading markets for this. It can provide capacity for these types of risks in excess of $2bn. The market also benefits from a wealth of knowledge and experience in being able to insure these types of special risks.
