Art Investors Will Be In Pickle As Major Works Begin To Decay, Insurer Cautions

Robert Hiscox, chairman of the Hiscox Group and a private collector who owns works by young British artists including Damien Hirst and Gary Hume, told The Times that iconic works such as Hirst’s shark or Tracey Emin’s My Bed could lose value as they decompose.

As many of the movement’s best-known, multimillion-pound pieces move into their second decade, it is an issue that is at the forefront of insurers’ and collectors’ minds, Mr Hiscox said.

“You’re buying a concept, but who wants a work of art that 100 years later has to be continually repaired?” he said. “I looked at the Saatchi collection and you could see that the condoms on Tracey Emin’s bed had become brittle — of course they have, it’s almost ten years old. This raises the question: can these things be replaced? Will any old condoms do or do they have to be Tracey’s?”

Hirst’s most famous works are most at risk because they are designed to decompose. His medicine cabinets, which can fetch up to £1.2 million, begin to smell after a few years, according to Mr Hiscox.

He said. “In 1990 I bought one of Damien’s medicine cabinets, called My Way — the one with the medications for the head at the top, working down the body. I had the cabinet of used medicine bottles in the office and you could see they were slowly fermenting.”

Mr Hiscox was forced to build a second, air-tight cabinet around it because health and safety experts told him that the art was poisonous and should not be kept in a workplace. “Our agent rang Damien and he said that that was the whole point, that they were decomposing in the same way as a human body.” Mr Hiscox has sold the work.

Hirst has restored some works held in private hands, but the artist offers no guarantees. Frank Dunphy, Hirst’s business manager, said that the artist did not leave instructions for how objects should be restored if he is unable to repair them himself. “Deterioration would not be an insurable risk, so collectors should bear that in mind,” Mr Dunphy said.

The artist recently replaced his pickled shark, titled The Physical Impossibility of Death in the Mind of Someone Living, after it was bought by Steven Cohen, an American collector, for a reported £6.5 million. The previous shark had rotted internally and become droopy and wrinkled. Other vulnerable high-profile works include Anya Gallacio’s Because I Could Not Stop, a bronze tree with real apples fixed to the branches that was included in her Turner Prize exhibition in 2003. Mr Hiscox said: “I was told that Anya Gallacio would come to replace the apples once they withered, but what happens when the artists die or get too old or can’t be bothered? Do they then license someone to do it and is the work devalued once it’s no longer the artist that does the work?

“Another problem is when things are made badly, either by accident or on purpose. Slapping a bit of acrylic paint on cardboard is building in obsolescence.”

Robert Read, a fine art underwriter for Hiscox, said that the market for decomposed artworks had not been tested, but was a looming threat. “This is absolutely something collectors and insurers are thinking about,” Mr Read said. “I haven’t seen any dramatic reductions in value of major works yet, but it’s something that may happen soon at auction. If it does, it will start to snowball.”

Mr Read said that, depending on its fragility, a modern work of art would cost between £1,000 and £2,000 per £1 million of cover to insure every year, but that the insurance would not cover deterioration. “All policies exclude loss due to gradual decline, for example, a watercolour fading in strong light,” he said. Tate Modern said that it had less to fear from decomposing art than private collectors because it has a team of conservators, who often consult artists about the techniques they used in the creation of the art. Chris Ofili, who used elephant dung as one of his materials, is believed to have disclosed his methods.

Charles Saatchi, the multi-millionaire art collector who dominated the Britart movement of the 1990s, said that he did not worry about his works decomposing. A spokeswoman told The Times: “It is not a consideration for us. It is not something Charles thinks about.”

Mr Hiscox said that only collectors who bought art solely as an investment rather than because they truly liked it were the ones who would lose out. “Brave collectors — the ones I admire — don’t mind,” he said. “Brave artists don’t mind that their work won’t last. That’s purity. You’re buying it and creating it because you love it.”

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