Diamonds may be for ever, but the Diamonds exhibition at the Natural History Museum (NHM) proved more transitory, closing three months earlier than planned on 22 November, following police intelligence of an imminent robbery.
With the gems on their way back to the lenders, museum professionals were left to muse on how this kind of outcome can be insured against, and whether holding such high-value exhibits as part of a museum display was, in fact, ill-advised.
The centrepiece of the sparkling show was the De Beers Millennium Star, the 230-carat pear-shaped monster that had been the target of a theft attempt on its last public outing, in November 2000, while on view in the Dome.
The Star alone is estimated to be worth more than £200m, and the value of the 100 or so exhibits may have topped £500m. Impressive, but far from record-breaking for a temporary exhibition. The 2003 Matisse/ Picasso show at Tate Modern had a risk value in excess of £1bn.
Since opening on 8 July 2005, Diamonds dazzled more than 70,000 paying punters before Scotland Yard acquired intelligence of an imminent visit from a less welcome element.
Official sources are not giving much away until arrests are made, but a security consultant who was privy to the intelligence gathered in the planned strike on the Millennium Dome says that the police's real fear was a daytime raid on the museum.
The former head of Scotland Yard's Art Squad, Dick Ellis, says: 'The big difference between this situation and that at the Dome is that the robbery was to be after hours at the Dome, and so the police could contain it without danger to the public.
I suspect that here, the robbery was to take place when the museum was most vulnerable - when it was open to the public, making it impossible to contain an armed robbery without risking public and museum staff in the crossfire, and risking a hostage situation. Unquestionably, they took the right decision.'
But what of the economic cost of such a closure? Arranging the appropriate insurance for blockbuster shows is a fine art. As a general rule, national collections such as the NHM are not permitted to take out commercial insurance.
Their first source of cover is the Government Indemnity Scheme (GIS). Permanent collections are not insured, but the GIS indemnifies risks of about £3bn a year on loans and temporary exhibitions in the UK.
Areas left exposed by GIS can be underwritten by commercial insurers. GIS operates a minimum liability, or excess, of the first £300 of a claim plus 1 per cent of the object's value, if more than £4,000, payable by the borrowing institution.
Lenders can disagree with GIS experts' valuations, and where their valuation is lower than that proposed by the lender, the borrower may acquire commercial insurance as 'top-up'.
Alexandra Richards, senior client manager at broker Aon Artscope, is an expert on putting together the right cover for temporary exhibitions.
'Within a single exhibition, the host institution might not have applied for GIS for every object,' she says. 'They may say, "We need you to cover us for minimum liability for everything, top-up for this, full cover for that."'
No provision is made under GIS to compensate sponsors or to cushion the loss of ticket sales if an exhibition is cut short, which is where commercial insurers step in.
David Bruce, the head of specialty at Hiscox, the market leader in cancellation and abandonment insurance, has several large fine art shows in London and New York among his clients. He covers everything from closure following a terrorist threat or power cut to loss of ticket sales due to a period of national mourning.
What has been the financial cost of the early closure at NHM? The show was exclusively covered by GIS, with no commercial minimum
liability, top-up or cancellation cover, but the financial fallout has been remarkably manageable.
If visitor numbers had continued as strongly as they started until 26 February, the planned closing date, with the usual surge in the final weeks, Diamonds may have lost more than £600,000 in ticket sales. A spokeswoman says that, although GIS did not cover it for this loss, the museum will absorb that loss, which is costly to cover.
And will the closure in South Kensington have any impact on future shows? Probably not. The risks run by the ultrahigh value exhibitions are normally very low. GIS has rarely had occasion to pay up.
Sandy Rich, an account executive at Blackwall Green, a broker that instructs museums on insurance and risk management, agrees: 'Museums are very good risks, in general, which is why we find that commercial insurance solutions can be found that are workable and inexpensive. And the criteria for qualifying for GIS is so exacting that, if you do qualify, your exhibition is as secure as you can get.'
So the Diamonds drama has a happy ending. Security of exhibits was declared to be excellent, and the early closure has not deterred this year's blockbuster shows from coming to London.
But one insurance insider wonders whether the prospect of a massive claim on Diamonds could have contributed to the prompt decision to close the show.
'If the government had had a loss and paid up, there would have been questions asked in the Commons: "What are we doing writing a cheque for £200m to De Beers? How many hospitals is that…?"'
Katrina Burroughs writes on the security and insurance of collections
With the gems on their way back to the lenders, museum professionals were left to muse on how this kind of outcome can be insured against, and whether holding such high-value exhibits as part of a museum display was, in fact, ill-advised.
The centrepiece of the sparkling show was the De Beers Millennium Star, the 230-carat pear-shaped monster that had been the target of a theft attempt on its last public outing, in November 2000, while on view in the Dome.
The Star alone is estimated to be worth more than £200m, and the value of the 100 or so exhibits may have topped £500m. Impressive, but far from record-breaking for a temporary exhibition. The 2003 Matisse/ Picasso show at Tate Modern had a risk value in excess of £1bn.
Since opening on 8 July 2005, Diamonds dazzled more than 70,000 paying punters before Scotland Yard acquired intelligence of an imminent visit from a less welcome element.
Official sources are not giving much away until arrests are made, but a security consultant who was privy to the intelligence gathered in the planned strike on the Millennium Dome says that the police's real fear was a daytime raid on the museum.
The former head of Scotland Yard's Art Squad, Dick Ellis, says: 'The big difference between this situation and that at the Dome is that the robbery was to be after hours at the Dome, and so the police could contain it without danger to the public.
I suspect that here, the robbery was to take place when the museum was most vulnerable - when it was open to the public, making it impossible to contain an armed robbery without risking public and museum staff in the crossfire, and risking a hostage situation. Unquestionably, they took the right decision.'
But what of the economic cost of such a closure? Arranging the appropriate insurance for blockbuster shows is a fine art. As a general rule, national collections such as the NHM are not permitted to take out commercial insurance.
Their first source of cover is the Government Indemnity Scheme (GIS). Permanent collections are not insured, but the GIS indemnifies risks of about £3bn a year on loans and temporary exhibitions in the UK.
Areas left exposed by GIS can be underwritten by commercial insurers. GIS operates a minimum liability, or excess, of the first £300 of a claim plus 1 per cent of the object's value, if more than £4,000, payable by the borrowing institution.
Lenders can disagree with GIS experts' valuations, and where their valuation is lower than that proposed by the lender, the borrower may acquire commercial insurance as 'top-up'.
Alexandra Richards, senior client manager at broker Aon Artscope, is an expert on putting together the right cover for temporary exhibitions.
'Within a single exhibition, the host institution might not have applied for GIS for every object,' she says. 'They may say, "We need you to cover us for minimum liability for everything, top-up for this, full cover for that."'
No provision is made under GIS to compensate sponsors or to cushion the loss of ticket sales if an exhibition is cut short, which is where commercial insurers step in.
David Bruce, the head of specialty at Hiscox, the market leader in cancellation and abandonment insurance, has several large fine art shows in London and New York among his clients. He covers everything from closure following a terrorist threat or power cut to loss of ticket sales due to a period of national mourning.
What has been the financial cost of the early closure at NHM? The show was exclusively covered by GIS, with no commercial minimum
liability, top-up or cancellation cover, but the financial fallout has been remarkably manageable.
If visitor numbers had continued as strongly as they started until 26 February, the planned closing date, with the usual surge in the final weeks, Diamonds may have lost more than £600,000 in ticket sales. A spokeswoman says that, although GIS did not cover it for this loss, the museum will absorb that loss, which is costly to cover.
And will the closure in South Kensington have any impact on future shows? Probably not. The risks run by the ultrahigh value exhibitions are normally very low. GIS has rarely had occasion to pay up.
Sandy Rich, an account executive at Blackwall Green, a broker that instructs museums on insurance and risk management, agrees: 'Museums are very good risks, in general, which is why we find that commercial insurance solutions can be found that are workable and inexpensive. And the criteria for qualifying for GIS is so exacting that, if you do qualify, your exhibition is as secure as you can get.'
So the Diamonds drama has a happy ending. Security of exhibits was declared to be excellent, and the early closure has not deterred this year's blockbuster shows from coming to London.
But one insurance insider wonders whether the prospect of a massive claim on Diamonds could have contributed to the prompt decision to close the show.
'If the government had had a loss and paid up, there would have been questions asked in the Commons: "What are we doing writing a cheque for £200m to De Beers? How many hospitals is that…?"'
Katrina Burroughs writes on the security and insurance of collections
