MZ Generation Immersed in Art... Will the Personal Art Insurance Market Open?

Rising Interest in Personal Art Insurance Market Amid Art Tech Boom

Source: KB Financial Group Management Research Institute

[Asia Economy Reporter Changhwan Lee] Recently, as the art-tech (Art + investment technology) craze has swept society, there is a forecast that the personal art insurance market will grow. It is analyzed that domestic insurers need to actively introduce personal art insurance, which is already well-established overseas.

According to the report "The Increasing Need for Art Insurance Due to the Activation of Art-Tech" by KB Financial Group Management Research Institute on the 4th, domestic art auction sales reached a record high of 143.8 billion KRW in the first half of last year. This is a threefold increase compared to the same period in 2020 and far exceeds the annual transaction amount of 115.3 billion KRW.

The report analyzed that as the asset market rapidly changed due to COVID-19, individual investments have been pouring into the art market, which has no acquisition tax or holding tax.

By age group, the younger generation invested the most. According to the report, among high-net-worth groups in 10 countries including the United States and the United Kingdom who purchased artworks last year, the MZ generation (people in their 20s and 30s) accounted for 64%. The average amount they spent on purchasing artworks reached 250 million KRW.

The increase in investments in art-tech such as artworks and precious metals, which had long been perceived as exclusive to the wealthy, including the MZ generation and the general public, is analyzed to be largely due to the emergence of art co-purchasing platforms.

For example, the Yoshiko photo exhibition, an exhibition investment project conducted last year on the K-content investment platform "Funderful," attracted 500 million KRW in investment funds, with about 80% of investors being from the MZ generation.

As the trading of artworks increases like this, it is naturally expected that the need for insurance will grow and the related market will expand.

Junmo Park, a research fellow at KB Financial Group Management Research Institute, said, "As the trading of artworks increases, the number of insured objects that require insurance will naturally increase," adding, "Frequent ownership changes are also proportional to the increase in new insurance policyholders, so the related insurance market will expand."

However, he pointed out that since there are virtually no related insurance products for individual customers in Korea yet, insurance companies need to take a more active approach to product development.

The domestic art insurance market has mainly been formed around large clients such as art museums, museums, and exhibitions. For personally owned artworks, proper products have not yet been sold due to a lack of experts, difficulties in value assessment, and the small market size.

On the other hand, overseas, major Western insurers such as Marsh and Chubb are actively selling personal art insurance. They mainly sell insurance products by partnering with reputable external institutions to assess the value of artworks or by adding special clauses to existing insurance products.

This content was produced with the assistance of AI translation services.