Welcome to our second news roundup, which combines industry news and views with interesting stories from the world of collections, luxury goods and private clients.
Your feedback remains as important as ever to us, so please do tell us if there are other areas you would like to know more about.
Inside the mindset of the collector
If you were unable to join our recent webinar, then you can find a link to the recording here. This was an absorbing discussion featuring Lockton's Charles Hamilton-Stubber and Harvey Cammell, Global Director for valuations, trusts and estates at Bonhams.
Covering a wide range of collectables, the webinar was an ideal platform from which to launch Lockton Collector, a policy designed specifically for your collectable items, underwritten exclusively by QBE. Lockton Collector provides a single policy to cover all your collector items – whether these are watches, wine, handbags, vintage toys, or indeed any other collectable.
Collecting in the digital era
One of the areas Harvey and Charles talked about during the webinar was digital art and collectables.
The rise of digital assets such as art coincides with the increasing use of cryptocurrency across the world, in particular non-fungible tokens (or NFTs). NFTs are electronic identifiers that verify the existence and ownership of a digital asset. Over the last five years, NFTs have been widely used as an extension to established digital currencies. They made international headlines in March when a piece by digital artist named Beeple was sold by Christies for a record $70 million (USD), making Beeple the third most expensive artist in living history.
The NFT helps to answer the seemingly obvious question of ownership of an asset, which, in all other respects, is intangible, as it exists only in the digital space. It also addresses the question of duplication, as traditional digital assets can be infinitely reproduced.
Irish crypto artist Kevin Abosch used the lockdown during 2020 to showcase his digital artwork. Following the cancellation of a number of physical events, he auctioned off his work on the OpenSea platform, an online marketplace for NFTs (which coincidentally saw over $95m change hands in February 2021) and realised a profit of over $2m.
The auction process displays each piece as a jpeg with metadata included to show the artist, when the piece was created and who owns it – a process broadly similar to the traditional art market.
What is clear is that the popularity of these digital assets depends on the generation of the potential buyers. Younger buyers tend to be more comfortable with the concept of owning something that cannot be physically handled. Overall, the appeal of these digital pieces is broadened due to the transparency of the work's creation and ownership chain.
The rise of the digital asset is not confined to the worlds of fine art and luxury goods. Global toy maker Mattel has recently announced digital-only releases of its Hot Wheels range. We wrote about toy cars and their appeal to collectors of all ages here. Mattel's decision to produce cars available only as digital art pieces, and purchased using NFTs will be followed by similar releases from other brands owned by the US giant. With annual sector revenue exceeding $900bn, it is easy to foresee that other companies will be watching Mattel's digital expansion closely.
Bite your big brother's finger – it could be worth your while
NFTs are not restricted to collectables. Many of you may remember the viral video in 2007 known as “Charlie bit my finger”. The Davies-Carr parents were recording a video of their son Harry and his baby brother, Charlie, to send to the boys' grandparents, when Charlie famously decided to bite his big brother's finger. The video was uploaded to YouTube, as it could not be emailed, and subsequently viewed by 880 million people.
The clip was sold recently as an NFT for $760,999, having been removed from YouTube.
Charlie and Harry are now 15 and 17 – and that makes us feel a little bit old. It also makes us wonder whether any entrepreneurial toddlers are weighing up the potentially lucrative trade-off in return for a mild sibling-induced injury….?
Traditional meets digital
Staying with the theme of what might be simply termed 'very modern art', The Royal Academy is hosting an exhibition of images created solely on an iPad.
The reason for these works being newsworthy is that the artist, whose 116 digital paintings depict the arrival of spring in Normandy, is none other than David Hockney, widely regarded as the greatest living British artist.
The works are said to closely resemble his famous use of watercolour, pioneered during the 1990s. This is not the first time Hockney has used contemporary technology to create works – he used Polaroid during the 80s to create composite artworks.
The world's most famous smile
Staying with art, we look next at the painting which, for many, is the best known (and most valuable) in the world. She was painted by da Vinci over 500 years ago and is instantly recognisable by her enigmatic smile.
We are, of course, referring to The Mona Lisa and the news that a copy of the painting is set be auctioned in Paris, where it could fetch as much as £250,000.
The work was created some time during the 17th century and is known as the Mona Lisa Hekking, named after its owner, antique dealer Raymond Hekking. Heacquired the painting during the 1950's, and at one point claimed that it was actually the real painting, with the replica being displayed in Paris after its theft in 1914. This was subsequently proved not to be the case despite Hekking embarking on a campaign while the original was on temporary loan in Washington DC.
An old master with a new twist
The effort required to restore paintings is painstaking. Works of art must be handled with extreme care, and the balance between maintaining patina and restoring them to their original condition is a fine one.
Where works have been cropped and original features removed, there is an understandable reluctance to try to make alterations, particularly where the changes were made in period and effectively become an integral part of the painting.
One such piece is The Night Watch by Rembrandt, painted in 1642 and trimmed on all four sides in 1715 to enable it to be hung between two doors at Amsterdam's City Hall.
Specialists used artificial intelligence to recreate the missing sections, scanning both the original (to set the correct levels for the 'new' panels) and a copy of the uncropped painting, which hangs in the National Gallery in London.
The new sections have been hung adjacent to the original work in The Rijksmuseum in Amsterdam and experts have commented that they bring new life to the painting, showing how Rembrandt originally conceived the work.
Meanwhile, at the movies
Another area touched on during the webinar was film memorabilia, an area that has seen significant growth in recent years. For anyone who has a favourite movie, there are regular opportunities to acquire a wide range of film memorabilia.
A forthcoming sale in Los Angeles includes a pair of spectacles and wand used by Daniel Ratcliffe during filming of the Harry Potter 'Deathly Hallows' films and a fedora worn by Harrison Ford as Indiana Jones – both iconic movie franchises among children and adults alike.
Authenticity is key when buying film memorabilia. Using a reputable seller or auction house is essential, as is a certificate of authenticity. Both can be used not only to insure the items for an accurate and adequate amount but to substantiate any claim in future.
Diamonds are forever – unless they're not real
We wrote last month about both new methods of preventing fake diamonds and increased levels of synthetic stones being produced.
News this month from South Africa saw several thousand hopefuls flock to a small rural South African village after a farmer came across a stone in a field. Approximately 3,000 people were seen digging in the area surrounding KwaHlathi in eastern KawZulu-Natal province, but sadly to no avail, as tests subsequently established that the stones were in fact quartz.
But when diamonds are real, they can be both forever and very big!
Travelling across the South African border, neighbouring Botswana remains Africa's largest producer of the precious stone and a diamond was recently mined which is believed to be the third largest of gem quality in the world.
Weighing in at an estimated 1,098 carats, the stone was mined by Debswana, a joint venture between the Botswana government and De Beers, where up to 80% of the income from sales goes to the state via royalties, taxes and dividends.
The value of the stone has yet to be confirmed, but the second largest gem quality diamond, the Lesedi La Rona also mined in Botswana was sold in 2017 for £39.5m.
The biggest diamond ever discovered remains the Cullinan, at 3,106 carats and forming part of The Crown Jewels.
Icons of motoring
Over at Lockton Performance, we have been releasing a series of articles on some of the most iconic motor cars ever made, and our most recent insight looked at a German sports car that has been in production for almost 60 years. If you hadn't already guessed, the subject is Porsche's 911 – you can read the article here.
Better still, we were able to get an inside view from one of the UK's foremost 911 experts, Mark Sumpter of Paragon and you can read what he had to say about the car here.
Lockton is the official insurance partner to the Porsche Club of Great Britain, arranging cover for over 4,000 club members. Our policy is underwritten exclusively by Axa XL. We can also offer solutions for individually owned specialist and classic cars right through to family fleets.
Cash for crash – and some much needed justice
Insurance fraud costs everyone through premium increases, so it is always positive to hear of fraudsters being apprehended and dealt with.
Four such individuals were recently sentenced for their part in a 'cash for crash' scam, with sentences of up to three months' imprisonment. This followed a minor collision in Greenford between a Mercedes and VW Polo, captured on the dashcam of the Mercedes. This also showed the aftermath, with none of the VW's occupants appearing to be injured.
Subsequent claims were made by four individuals for whiplash injuries and, crucially, the camera revealed that the claimants did not match the descriptions of the occupants of the VW. Additionally, claims made by the men about the accident affecting their jobs were proved to be untrue, with two being unemployed and another claiming to be a boxer, when he had in fact only started fighting professionally a few days before the incident.
Had they been successful, the combined value of the fraudulent claims would have been in the region of £27,000.
Cyber highlights
We end this month with some content written by our colleagues in Lockton's Global Cyber division, focusing on passwords, security, common breaches and, rounding out this month's roundup where we began, cryptocurrency.
Password security
Weak passwords and the reuse of old passwords are an easy “in” for cyber-criminals.
A recent examination of SpyCloud's 2021 report uncovered 39 million breach assets which were tied to FTSE 100 companies and their subsidiaries. A breach asset is a piece of information within a breach record such as a password, phone number or address.
Of those breaches, 2.6 million were plain text log-in credentials of individual employees.
By way of snapshot:
1. The following industries are most affected by password reuse:
- Energy sector
- Real estate
- Consumer staples
- Telecommunications
- Healthcare
2. The most popular passwords were:
- george
- password
- 123456
…with the following also featuring frequently:
- liverpool
- arsenal
- welcome
- qwerty
- letmein
The report highlights that many of us make minor changes to old passwords when updating, e.g. 'password' becomes 'Password1' or 'Passw0rd!' Sophisticated account checker tools utilised by cyber criminals allow these variations to be exposed with ease.
Current security advice is to create strong passwords using three random words joined together.
Did cryptocurrencies create ransomware?
Against a backdrop of increasing ransomware attacks, with ransom demands now regularly at seven and eight figures, there is a lot of discussion in the marketplace as to whether cryptocurrencies have created this ransomware proliferation.
On the basis that the first ransomware event took place in 1989, some 20 years before cryptocurrency existed, cryptocurrency clearly did not “create” ransomware, but many would argue that it has definitely facilitated ransomware attacks. The big advantage of course is the anonymity factor. Tracing cryptocurrency is certainly more complicated than tracing a bank transfer, so the criminals are more likely to be successful in their endeavours.
The US government is looking into how authorities might better track the flow of cryptocurrency from victims to attackers, which might have some effect in slowing down ransomware attacks. This is not just a US problem and it will be interesting to see if similar measures are replicated elsewhere. (The chief executive of the UK's National Cyber Security Council, recently noted that it is important that no country turns a blind eye to ransomware gangs).
The potential for increased regulation of cryptocurrency may over time dampen the ransomware scourge but that said, a determined criminal will always find a way to take advantage, cryptocurrency or not.