Zilkens'
News Blog

Zilkens' News Blog 27 2026

More than half the year has already passed – and with temperatures in Europe currently racing from one record high to the next, there’s only one thing on everyone’s mind: a break from the heat! Stefan Kobel begins his half-yearly review of art market reports with the market itself – next week he’ll look at the art fairs, and finally at the auction scene.

Very few insurers invest in having their own art experts on staff, and even fewer brokers have staff who are knowledgeable about art. This is an environment in which expert advice offers wonderful opportunities, because, according to conventional wisdom, no claims handler should be expected to decide on such sensitive issues as depreciation without an expert’s opinion. In the audit departments sit people who are removed enough from the real world to be able to assess matters objectively, and they scrutinise the decisions of those who deal directly with customers. That is part of compliance. Every ordinary employee, regardless of gender, has a great deal of respect for these people, because they do not want to find themselves in a report where they have to justify their behaviour and decisions to the board (which changes every three years at the latest anyway). Which brings us back to the depreciation of works of art. Many experts have already struggled with this issue, as there are no objective criteria by which to determine a reduction in value following damage. Of course, the injured party has a duty to minimise losses – in most legal systems. It is therefore standard practice to attempt restoration in the case of partial damage. The reduction in value is determined afterwards and must then be based on the date the damage occurred. Damage occurred in 2024 – restoration completed in 2026 – market conditions etc. in 2024 are the decisive factor. Artists who are the subject of hype sometimes lose value at breakneck speed – much like passing fads – yet the reduction in value must still be based on the year the damage occurred – a tricky situation if a work’s value drops from 1 million to 100,000 within two years and the restoration takes that long. Assuming a 50 per cent reduction in value, 500,000 Geld plus costs would therefore be due. There will be insurers who start to dispute this. The wheat is separated from the chaff at the point where the underwriter has to admit that he cannot comment on the matter because he is not an expert. At best, he might have a personal opinion. But unfortunately, that doesn’t count. And before you know it, the experts are on the scene, ideally backed by resourceful lawyers who turn the incident into a never-ending story. Only the very patient and the wealthy can afford to wait for a claim settlement that has been fought out in court. For the insurance companies, it is generally cheaper to settle such claims quickly with a degree of flexibility – but that requires in-house expertise.

There are repeated skirmishes in the Strait of Hormuz, despite the ceasefire. This is presumably also a sign that power within Iran is not yet sufficiently structured. The hardliners do not want peace and are endeavouring, through sporadic attacks on ships passing through the strait, to poison the atmosphere for dialogue sufficiently. This poses a greater challenge for countries in the southern hemisphere, as they source a large proportion of their energy via the strait.

Wishing you all a cooler week – stay well.

Stephan Zilkens on behalf of the team at Zilkens Fine Art Insurance Broker GmbH in Solothurn and Cologne