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Does my art collection have enough insurance coverage?

I am always excited to learn the value of a contemporary artwork when I am writing an appraisal. It is so interesting to me to watch how quickly contemporary art is appreciating in value. I am speaking particularly about the work of living Canadian artists. From about the mid-1990’s, contemporary art evolved into a multi-billion dollar global industry. According to Anthony Westbridge’s WPL Composite Canadian Art Index, 1997/98 was the beginning of the substantial growth in the Canadian art market. Contemporary Canadian art boasts its own museums and art auctions. Waddington’s Concrete Contemporary Art auctions launched in 2012 with the aim of expanding a secondary market for post-1980 Canadian art. Heffel’s spring auction 2013 brought in $11.5 million and included the first art video work ever sold at auction in Canada.

David Urban, Initial, 2012, oil and acrylic on canvas, 30 x 40”/76.2 x 101.6 cm
Courtesy TrépanierBaer Gallery, Calgary, Alberta

With living artists attaining record prices at auction, it has become very desirable to invest in the contemporary arts. The works of many successful mid-career Canadian artists like Harold Klunder, Micah Lexier, Ron Moppett, David Urban and Chris Cran to name just a few, more than doubled from 2000 to 2010. That’s a pretty good investment in these times when it’s difficult to earn 2 - 3% from liquid investments. The works of senior Canadian artists like Takao Tanabe, Mary Pratt, Christopher Pratt and Gordon Smith, are examples where artwork has appreciated even more quickly.

Harold Klunder, Montreal, Self-Portrait, 2010-2012, oil on linen, diptych 111.8 x 71.1 cm - each panel; overall 111.8 x 142.2 cm
Courtesy TrépanierBaer Gallery, Calgary, Alberta

What is selling today is contemporary art and prices continue to rise. As recently as five years ago the Canadian art auction market was dominated by the Group of Seven and other blue chip artists. Today, most of the premium works by those artists are held in institutions, or by collectors. Auction houses have been looking to post-Second World War and contemporary art to build their markets. The market for contemporary art has been growing and annual events such as the Toronto Art Fair generates gross sales estimates in the range of $15 million dollars for the 114 participating galleries from Canada, Australia, Europe, Japan and the United States.

Chris Cran, Cheers! (Candidate #2), 2013, oil and acrylic on canvas, 96 x 48”/243.8 x 121.9 cm
Courtesy TrépanierBaer Gallery, Calgary, Alberta

While most of Canadian contemporary art is sold into private collections, corporations also build collections of contemporary art. Corporate art humanizes office spaces, adding warmth, prestige and credibility to the office environment. It is a good investment, and corporations are also eligible to receive generous tax allowances on purchases of contemporary Canadian art (an incentive to corporations to support the work of living Canadian artists).

Ron Moppett, PINK&GREEN/HOMEANDAWAY, 2009, oil and alkyd on canvas, 2 panels: 48 x 63”; 48 x 12”/121.9 x 160 cm; 121.9 x 30.5 cm
Courtesy TrépanierBaer Gallery, Calgary, Alberta

Many of the major Canadian banks have art collections housed across Canada in offices and branches. The art is purchased to enhance the working environment and to support local artists, rather than for investment purposes. Some also offer art advisory services to their clients. The Bank of Montreal has started an exclusive new program to teach its wealthy clients how to successfully collect art. The Bank of Nova Scotia offers both formal and informal art advisory services to clients. The Scotiabank Group Fine Art Collection offers one-on-one consulting for clients and executives. The Royal Bank of Canada’s art curator discusses art collecting with clients at corporate events, gallery openings and the Toronto International Art Fair.

It is particularly important that artworks are appraised every five years to protect their value. Collectors do not want to pay for excess insurance but they need to have their investment protected by adequate coverage ensuring protection in the event of a loss. An appraisal ensures your investment is not over or under insured.

Treml, Karen E. Contemporary Art: An Alternative Investment. PrivateWealthCanada.ca. 2013

Trichur, Rita. Investing in beauty: BMO helps clients find value in art. Personal Finance. the star.com. November 13, 2010

Westbridge, Anthony R. Canadian Art Sales Index. 2013 Edition. 2011-2012 Auction Season. Page 122.Treml, Karen E. Contemporary Art: An Alternative Investment. PrivateWealthCanada.ca. 2013

Pauline Lindland, ISA AM
International Society of Appraisers, Accredited Member
www.artadvisors.ca
(403) 262-7399
pauline@artadvisors.ca

Please contact me for an appointment. I look forward to working with you!

Pauline

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