Markel has more than doubled the fine art and specie capacity it offers through Lloyd's, from US$100 million to US$250 million.
The move lets brokers place larger risks on a single Lloyd's stamp, as soaring asset values push more placements up against the limits of traditional capacity.
The increase applies to Markel International's London fine art and specie business. It covers art collections, jewellery, collectibles, precious metals and other high-value assets.
Markel said brokers would be able to access the higher limits through one Lloyd's placement, rather than relying on additional insurers or alternative placement structures.
Markel's head of fine art and specie, Danny O'Donoghue, said the move reflected pressure from both clients and brokers.
"Clients are increasingly requiring larger limits due to rising valuations of fine art collections, significant increases in precious metals values and greater concentrations of high value assets," said O'Donoghue.
He added that Markel had always been able to write large risks on company paper, but that aligning capacity on its Lloyd's stamp would make it easier for key broking partners to trade with the business.
The precious metals point is especially acute. Gold's run to record prices this year has created an unusual squeeze in the specie market, according to law firm Browne Jacobson. The same physical pile of metal now represents a much larger insured value, often approaching or exceeding the maximum limit the market will reliably deploy to a single storage location. The firm said brokers have reported that available cover for a single location has risen from roughly $3 billion to as much as $5 billion in recent years, but that the gold rally is still outpacing insurable capacity at many sites.
Markel is adding capacity to a class that has been attracting it. The Lloyd's fine art and specie market now spans 57 syndicates with aggregate capacity of around £4 billion, according to WTW's specialist broking team, as Insurance Business reported in July. The class's relatively predictable claims profile and absence of long-tail liability have made it attractive to syndicate capital.
At $250 million, Markel's new line sits well above the maximum line sizes several other London market carriers publish for the class. Those typically range from around $50 million to $150 million per risk. Larger line sizes from individual carriers reduce the number of insurers a broker needs to complete a large placement, which can cut placement time and simplify claims handling.
The class's risks were on full display last October, when thieves stole eight pieces of the French Crown Jewels from the Louvre in a daytime raid lasting a matter of minutes. Paris prosecutors valued the haul at around €88 million. The jewels were not privately insured, because French law bars national museums from insuring their collections, but the theft prompted fresh scrutiny of museum and gallery security worldwide.
For underwriters, bigger limits make that scrutiny more important, not less. Concentrations of high-value assets in a single vault, gallery or private collection mean a single theft or fire can now produce a severity loss that would have been hard to imagine a decade ago.
For Lloyd's brokers, the immediate benefit is simpler placement. A broker placing a large private collection, a gallery's inventory or a bullion vault can now secure a bigger share of the risk from one carrier, with fewer layers and fewer insurers to co-ordinate.
The wider point is that limits are struggling to keep pace with valuations. Clients whose collections or metal holdings have risen in value may be underinsured if their sums insured haven't been revisited.
Brokers handling high-value schedules should be checking valuations at renewal, and testing whether existing programmes still reflect today's prices for art, jewellery and precious metals.
