In our latest ARTE Generali Talk, Iris Handke, Head of Germany, speaks to a true art insurance expert with deep knowledge of the art market, Georg von Gumppenberg, at the Pavillon 333 next to the Pinakothek der Moderne in Munich. In a truly stimulating discussion, Von Gumppenberg shares his views on our 4 propositions that define ARTE Generali and the value we bring as a lifetime partner to our clients: Products, Service, Expertise and Digital.

What is the most important when it comes to the design of products today? Which level of service do clients expect from their art insurer? What characterises excellent client-consulting? For what reason have digital services become so critical for clients and brokers today - especially since the pandemic?

Find out in our latest ARTE Generali Talk! 🎥 🎬

In a period, in which physical encounters with art works were reduced to nearly none, it has come as no surprise that it is a digital technology which captures both dreams and nightmares for anybody engaged in the art world. Following the already now subdued hype around blockchain technologies and cryptocurrencies, now NFTs or “non-fungible tokens” make headlines: not only the art press, auction houses and now also galleries, but also the global offer of digital talks and conversations seem to find no other topic than NFTs. And the waves are spreading, with mainstream papers, economists and financial analyist being interested in the financial speculation around ‘cryptoart’ as a potential asset class. There seems to be no escape from what has been lauded recently as the art world’s Napster by Christie’s Expert Noah Davies (https://www.coindesk.com/nfts-are-the-art-worlds-napster-says-exec-at-christies-auction-house).

The art world likes its hypes and not everything that shines will turn out to be gold. But as hypes go, it is so widespread that a closer look at what this new buzzword means and how individual art lovers might be able to engage with it – or decide to stay well away – seems relevant now.

What are NFTs, and how do they relate to art?

NFTs have nothing to do with art per se. NFTs are unique, that is non-fungible, digital data records kept on a distributed ledger (a blockchain) that are capable of being traded – hence the idea of a token – and which then represent the ownership of a digital asset. While making a splash in the art world, the most recent development seems to be the ownership of people’s Tweets. Important is that the sales transaction remains in the digital space and is more often than not related to digital art (or other digital collectables) which are being paid for by cryptocurrencies (Ethereum) only. Successful digital art platform worth visiting are Nifty Gateway MakersPlace, SuperRare and Verisart.

What does this mean for the potential consumer?

To discuss the potential impact of NFTs on the art market would take too long to discuss here and remains highly speculative at this point in time. What becomes more relevant is to understand how the buzz around NFTs might impact the end consumer or art lover on an individual basis. NFTs have really arrived in the art market big time with Christie’s spectacular sale of Beeple’s digital collage of 5000 images “Everydays” for 68 Million US Dollars earlier this year. This auction record meant that while people still might not understand NFTs, they feel more inclined to trust them, as they are endorsed by trusted brands in the art market. Ever since have auction houses tried to follow in Christie’s footsteps with both Sotheby’s and Phillips announcing NFT minted artworks for sale and also blue chip galleries stage exhibitions which feature some element of an NFT “drop” in which an art work appears in the digital sphere, such as recently with Petzel Gallery in New York (Simon Denny) or Pace Gallery (John Gerrard).

For potential collectors, NFTs can be attractive as they inscribe value especially to digital art works, which might be interesting for anyone not interested in hanging a painting over their sofa for example. They speak to tech-savvy consumers who are not interested in the traditional object focused art market. The technology is interesting for artists as it allows them to monetise something that was hard to ascribe value to previously, and smart contract technology means they receive loyalties should work be resold. If it really makes sense to possess digital ownership of something ideally unlimited digitally is a very different question, as is the one, if digital artworks will actually keep their value over time. If the notion of artificial scarcity will establish itself will remain to be seen. Not to mention that the quality of a lot of the work for sale needs to be carefully considered and the question of what good art is currently being stretched in the digital sphere. It is not surprising that many works are created by designers and the visual language is compelling but can be void of content.

But there are more drawbacks than just the question of quality control and art world validation. Minting NFTs, that is inscribing them on the block chain, draws immense amounts of energy. Artist and climate activist Joanie Lemercier became very aware of this when he conducted his first NFT drop in form of six videos. Having sold out within 10 seconds, he calculated that the transaction costs were 8.7 megawatt-hours; equivalent to two years of energy consumption in his studio. He subsequently cancelled further drops despite the potential to make quite a lot of money really quickly. The dominant blockchain currency Ethereum uses as much electricity a year as the country of Nigeria (https://digiconomist.net/ethereum-energy-consumption) due to the immense computer transactions (mining) needed to keep the information on the blockchain secure. There is a growing trend of artists raising alarm bells around the ecological impact of NFT transactions such as John Gerrard or Simon Denny.

Another real issue especially for the collector is the question about copyrights. Ownership does not equal ownership of rights, as became clear when the platform Opensea wanted to sell an NFT of a drawing by Jean-Michel Basquiat at the end of April, which claimed to include the copyright to the image and even the right to destroy the drawing itself after purchase. As the Estate of the late artists owns the copyright of all works, this was not possible, and the drawing was withdrawn from auction. We can expect more issues around legal facets especially as laws are not as robust yet in the digital sphere as in the dealings with physical art.

The landscape here is complex. Two contrary hopes focus on the new technology. On one hand the hope for greater equity in the art market, a greater acceptance for digital art for example, smart contracts that might enable artists to claim loyalties made from their sale and other ethically sound desires, that would enhance trust in the market for both producer and consumer alike. On the other hand, we see speculators aiming to make a quick gain by hyping up the general societal interest in the topic and especially new buying audiences that NFTs can reach, which were resistant to the art market before. It comes as no surprise that the purchaser of the Beeple NFT, Vignesh Sundaresan, also known as MetaKovan, is himself a Cryptoinvestor.

In a time when museums, art fairs and galleries slowly begin to re-open, it will remain to be seen if the talk of NFTs will become last year’s fancy, overridden by our desire to buy, look and confront physical works, or if its legacy and integration into the financial aspects of the art market may grant it a firm place in a globalised marketplace. Speculation is in any case ripe, and we have seen in the past what happens when art market bubbles burst. The tech magazine Wired called the NFT craze recently the 21st Century Tulip Fever. And financial expert James Bowden called NFTs “speculative bubbles brought about by stimulus cheques in the US, lockdown boredom and low interest rates.” (https://theconversation.com/nfts-are-much-bigger-than-an-art-fad-heres-how-they-could-change-the-world-159563) So before you invest, wait at least until lockdown is over.

In our new interview series in partnership with BeauxArts,com, we let art collectors talk about their greatest passion: their love for art and their own art collection!

Art collector Gérard Bloch tells us how he started to collect art in the first place, what artists he collects and what art means for him: "I believe there is a similarity between loving to travel and loving art. Art allows me to travel and to see things that I'm not used to seeing and that I wouldn't know how to see on my own. Many collectors say the same thing as I do about art, art is life."

Stay tuned for many more art collector interviews to come!

With the ARTE Generali App, we take care of the art collection, the insurance and all related needs of our customers. With a variety of features, we address all the needs and concerns of an art collector in today's modern age.

Manage and enjoy your entire art collection, whenever and wherever - with MyCollection. With just a few clicks, you can easily store and categorise your art pieces in MyCollection. Just take some photos, describe it and your art collection is up-to-date.

Market Trends provides you with valuable information about the contemporary artist and his development of your individual art piece - with real-time market insights based on AI.

MyEvaluation assesses the market value of your paintings, sculptures and antiques - piece by piece. With a few clicks, you can have your artwork evaluated by our partner experts and receive a realistic evaluation.

With MyConcierge you have unlimited services related to art at your fingertips. ARTE Generali provides access to a qualified expert network, from transport to storage to restoration and much more.

With MyDocuments you can easily organise and share all your documents with your insurance expert. Whether it’s your policy documents, certificates or invoices, you will find all documents in one place and can access them anywhere and anytime, like in the event of a claim.

And what if the unthinkable should happen? MyClaims takes care of everything: just fill out the digital form and a specialised claims manager will get in touch immediately to provide the assistance you need.

2021 has been a successful year for ARTE Generali, thanks to our partners who accompanied us on this exciting journey. 

The ARTE Generali Team offers its best wishes to all our partners, clients and public in celebrating the passion for art.

See you in 2022!

Wondeur uses quantitative analysis to clarify aspects of the art world and art market while respecting its main characteristics. The goal is to reconcile the mathematical and numerical practices with history of art knowledge in order to understand what gives value to art and what makes it such a cultural force. In order to do so, Wondeur has focused on the past century of history of art and has acquired data on the main artists and their careers. Wondeur has aggregated data for approximately 95% of artists born after 1900 and who have operated throughout the 20th century. The data gathered covers all aspects of their careers, including factors such as personal and collective exhibitions, collections, acquisitions and publications. By leveraging on artificial intelligence, Wondeur is able to examine how such events are interconnected and to make predictions about possible future risks throughout an artist’s careers and potential variations in value of his or her artworks.

Moreover, Wondeur analyses the whole spectrum of the art world, including an assessment of its mechanisms, factors that determine its evolution, and the impact that each art institution (e.g. galleries, museums, non-profit institutions etc.) has on the art world as a whole. Wondeur differentiates itself from competitors thanks to the depth and breadth of its analyses and its capacity of identifying the actual factors that determine value’s evolution rather than simple trends. To this day, the majority of available solutions on the market focus exclusively on 1% of market transactions and mostly base their analyses on auction results. Through the implementation of a highly innovative approach, Wondeur yields significantly deeper analyses and insights, making it a strategic tool that advisors can use in managing art as a cultural asset class.

The partnership between ARTE Generali and Wondeur, makes it possible for ARTE Generali’s clients to access the latter’s services via the “Market trends” functionality available on the App. In this way, the collector not only can monitor the performance of artists who are already part of his or her collection, but also carry out comparisons amongst artists. Based on the data acquired from the collector, the platform can outline a positive trend for a specific artist (e.g. artist in “growth” phase) based on which the collector can choose whether to proceed with a purchase or not.

Wondeur also supports the management of institutional collections, such as corporate ones, by carrying out four level analyses based on the following parameters: by asset, by artist, by portfolio or by market performance. By uploading the necessary data on the platform, the system recognizes the artists and performs a portfolio analysis. In this way, the tool assesses their value and risk distribution in order to support advisors in the decision of which artworks to insure. Furthermore, this approach makes it possible to identify collection biases and to understand how to build collections that are more representative of current audiences.

In the past eight months, Wondeur has also been evolving its capacity to analyze NFTs, a trend with rising popularity in the art sector. Woundeur’s tool may already be used to analyze the values and risks of NFTs by applying predictive analysis to this new asset class. Italian artists play a significant role in this movement and have encountered so far the appreciation of numerous foreign collectors, especially in the United States.

Wondeur’s role could be compared to that of an art consultant supported by artificial intelligence. The latter does not aim at substituting the art expert’s competences but rather at integrating and enhancing them. There are currently two types of artificial intelligence. The first strives to replace human knowledge and, in the art world, this would represent a great mistake. The second is finalized at integrating and promoting human expertise. Wondeur focuses on the second and the combination of know-how and artificial intelligence are exactly what this market currently needs.

Italo Carli is Head of ARTE Generali Italy since Februrary 2020. Following his degree in Electronic Engineering at Politecnico in Milan, he started his career in the IT sector and progressively transitioned to the insurance one where he specialized in Fine Art risks.

Sophie Perceval and Oliver Berger are both French and based in Toronto. They have founded the startup Wondeur AI which uses artificial intelligence and big data to analyze the impact that museums and cultural institutions have on the value of artists and their artworks.