Research: High net worth collectors are concerned their art and collections are underinsured
New research* commissioned by specialist insurer Ecclesiastical has revealed three in five (62%) high net worth (HNW) collectors are concerned their art and collections are underinsured, presenting an opportunity for brokers.
With rising inflation, price fluctuations are a key concern for wealthy individuals. The survey of 250 UK HNW individuals who invest in art and other collectibles found three in five (60%) are concerned about increases in values of their assets.
Three quarters (76%) of those surveyed said the value of their art and collections has increased during the past 12 months. Three quarters (76%) also expect the value of their art and collections to increase further during the next year.
Having regular valuations to keep pace with value fluctuations is essential. The research discovered over half of HNW collectors say they have at least one collection appraised annually. However, 5% admit they have their art and collections valued more than every five years and 4% do not get their collections valued at all.
Collections are most commonly valued by an independent professional or registered valuer (86%) and most likely for insurance purposes (69%). However, two in five (37%) of those surveyed said they have a probate valuation and over a third (35%) reported having a high auction valuation.
Ecclesiastical is encouraging brokers to speak to their clients about the importance of regular valuations to ensure they have the right cover in place.
The specialist insurer recommends HNW clients should review their sums insured annually. Under the Ecclesiastical Art and Private Client policy, clients with professional valuations less than three years old at the time of loss benefit from extended replacement cover, meaning the insurer will pay the value of the item at the time of the damage even if this is more than the value shown in the valuation.
Dr James Lindow, Underwriting Director for Art and Private Clients at Ecclesiastical, said: “Underinsurance has always been an issue in the high net worth sector, but now, with continued high inflation, it’s more important than ever that brokers are speaking to their clients to about the importance of regular valuations. Our latest research has found the majority of high net worth collectors are concerned their art and collections are underinsured. Wealthy individuals should review their sums insured annually to ensure their possessions are insured correctly. Brokers play a vital role in ensuring their clients have the correct cover in place.”
Last year, Ecclesiastical launched an enhanced high net worth home insurance product that includes cyber damage, cyber-crime and online liability cover as standard, and optional additional covers including business cover and travel insurance.
£5.3 billion lost from over 50s retirement pots throughout the course of the pandemic
4 million over 50s workers are continuing to save less towards their retirement when compared to before the pandemic – with £3,283 lost on average
Those who have cut savings are now putting £155 less monthly towards retirement, however at the peak of the pandemic contributions dipped by more than £200
Legal & General Retail Retirement (LGRR) analysis suggests this reduction in payments could delay the retirement of someone who saved less by more than four years (based on the median average) if contributions remain at reduced levels.
Financial outcomes can be returned to pre-pandemic levels and LGRR encourages people to ‘Spend A Day’ on retirement this Pension Awareness Week with its course with The Open University
Over 50s workers in the UK could have a £5.3 billion hole in their collective pension pot due to cutbacks on retirement savings over the course of the pandemic, according to new research from Legal & General Retail Retirement (LGRR) 1.
The new findings, released as part of Pension Awareness Week, estimate that approximately 10% of pre-retired over 50s – 1.4 million people2 – are continuing to save less every month when compared to before the pandemic. At present, those over 50 saving less have reduced their monthly savings by £155 a month, however at the peak of the pandemic this was an average of £219 less a month. Overall, over 50s saving less towards retirement will have contributed £3,283 less on average over the course of the pandemic than they otherwise would have.
Over 50s workers who are continuing to save less are doing so for a variety of reasons, such as pay decreases (39%), redundancies or job losses (22%) and the impact of being furloughed (13%). One in five over 50s saving less (20%) have also had to reduce their retirement contributions in order to provide more monetary support to their loved ones.
Retirement planning course with The Open University
To help those approaching retirement understand their options – and manage their financial affairs better in later life – Legal & General has a free online course with The Open University, setting out a series of stepping stones to a financially secure retirement.
The introductory 4-hour course combines guidance, short videos and tools and covers various aspects of retirement planning, from how to budget for retirement, how different types of pensions work and what to do if pension income is at risk of falling short.
“It’s completely understandable that those who have faced financial hardship as a result of the pandemic may have looked for opportunities to cut back on their outgoings. However, as our research shows, saving less, particularly for those in their 50s, could have a significant impact on retirement prospects and planning. Our own analysis suggests that those who have saved less would, based on the median average, need to bring their contributions back to pre-pandemic levels, then pay an additional £41 per month to make good on their shortfall. If the same saver does not bring their contributions back to pre-pandemic levels they might need to delay their retirement by more than four years to reach the levels they previously would have saved before cutting back on their monthly contributions.
As we look ahead towards a period of recovery, the best thing people can do is commit to spending a day sorting through their affairs to better understand the options at their disposal, rather than burying their head in the sand. To encourage people to do this, we offer a range of resources, including a free online course that can be completed in an afternoon. Our hope is that by encouraging older workers to engage with their later life finances, growing numbers will be equipped with the tools to enjoy a more comfortable retirement.”
Emma Byron, Managing Director, Legal & General Retirement Solutions
Finland: EIB lends EUR 40m to Fazer Group for research and development
– European Investment Bank (EIB) finances Fazer’s research and development activities, including the construction of an innovative xylitol manufacturing facility.
– EUR 40m loan for activities to be rolled out in Vantaa, Lahti and partially also in Lidköping.
The EIB and Fazer have signed a EUR 40 million loan agreement to finance Fazer’s research, development and innovation (RDI) activities in the coming years. Specifically, Fazer will fund the construction of a new plant, where the sweetener xylitol will be extracted from discarded oat hulls. This will be built next to the mill, located in Lahti, Finland. It is expected that the new facility will produce 4 000 tonnes of xylitol per year out of 20 000 tonnes of oat hulls, a by-product of the firm’s milling business, thus also reducing waste.The project will also support RDI activities relating to Fazer’s bakery and confectionery products, biscuit and grain products, plant-based meals and non-dairy products, with a focus on developing new ingredients to improve quality and shelf life, as well as new products for the well-being segment. The R&D activities will mostly be carried out at Fazer’s Vantaa HQ, and to a lesser extent in Lidköping in neighbouring Sweden.
Christoph Vitzthum, the CEO of Fazer, said: “Fazer sees food as a solution and foodtech makes the food system more productive, affordable, sustainable and healthy. As sustainability is an integral part of Fazer’s strategy, innovations supporting the circular economy, such as the production of xylitol from oat hulls, represent a future direction for the food industry. As we have already now seen a huge interest in oat-based xylitol and an increasing demand for xylitol, we have adjusted our original investment plans to build a solid foundation for potential future expansions of the xylitol capacity. Accordingly, we have increased the investment by approximately EUR 10m.”
Fazer is transforming itself into a modern sustainable food company in a joint direction, executing its ambitious growth strategy with a focus on innovation across categories. Building on the current strengths of Fazer’s research and development capabilities as well as open innovation in collaboration with universities, research networks and start-ups, Fazer aims to strengthen its position as a frontrunner in foodtech.
The new xylitol production factory will valorise by-products of Fazer’s milling business and therefore contribute to circular economy goals. The plant will produce the biomass feedstock for an associated, third party CHP plant that will supply renewable heat and power to Fazer’s site in Lahti, thus reducing the climate footprint of its operations.
Fazer Group
In 1891, the young Karl Fazer opened his first café with a mission to make food with a purpose – and a passion to create moments of joy for all the people around him. It became Northern Magic. Made Real. Today, Fazer is an international family-owned company offering quality bakery, confectionery, biscuit and grain products, plant-based meals, non-dairy products, on-the-go food and drinks as well as food and café services. The Group operates in nine countries and exports to around 40 countries. The success of Fazer has been built on Karl Fazer’s vision, values and fearless creativity: the best product and service quality, beloved brands, the passion of skilful people and responsible ways of working. In 2018, Fazer Group had net sales of EUR 1.6 billion and more than 15 000 employees. Fazer’s operations comply with ethical principles that are based on the Group’s values and the UN Global Compact.
Poland: EIB boost for research and development
– A EUR 305m loan agreement with the Polish government will help national scientific centres in Warsaw and Krakow fund projects in both early-stage and applied research activities- Fifth EIB loan of this kind in less than ten years, backed by Horizon 2020, The EU Framework Programme for Research and Innovation
Good news for researchers and scientists in Poland. The European Investment Bank (EIB) and the Ministry of Finance have signed an agreement to finance in the years 2019-2020 wide-ranging research programmes promoted by the National Science Centre (NSC) in Krakow and the National Centre for Research and Development (NCRD) in Warsaw. The EIB loan is supported by the European Commission under the InnovFin Science initiative in the framework of Horizon 2020.
The EIB will provide a EUR 305m loan (equivalent to approximately PLN 1.3bn) to the Ministry of Finance, who will use it to complement the government funding granted by the Ministry of Science and Higher Education to the two centres to finance R&D activities of public or private entities. The National Science Centre, located in Krakow, supports basic research and projects undertaken by researchers at different stages of their career in all fields of science, technology and humanities. The National Centre for Research and Development (NCRD), located in Warsaw, supports applied research and development projects and innovation activities in Poland.
Vazil Hudak, EIB Vice-President in charge of operations in Poland, said: “Fostering innovation is one of the priorities of the EU bank. With this new agreement, we will ensure that funding for research and development in Poland benefits both early-stage and applied research, addressing the overall needs of Poland’s scientific and business community. More affordable funding along the entire value chain of research and development means that Poland will move forward towards a knowledge-based economy”.
Jerzy Kwieciński, Minister of Finance, Investment and Development said: “The meaning of projects implemented jointly with the Bank is growing, especially in the field of research and development, health care and social area, which reflects priorities of the Government’s policies. Those investments in these fields will, in a long-term perspective, improve competitiveness of the Polish economy”.
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: “With this agreement the European Commission shows its continuous support to research institutions and their aim to strengthen Poland’s science base for both fundamental and applied research activities. The €305 million loan will help to create the future Polish innovative products and services.”
Additional information about the agreement
The National Science Centre (NSC) in Krakow and the National Centre for Research and Development (NCRD) in Warsaw are responsible for financing projects procured on a competitive basis and carried out by public and private bodies. It is estimated that approximately 20 000 researchers annually will obtain at least some funding from the grants distributed by the two institutions. This corresponds to 15% of the total R&D workforce of the country, for a two-year period.
This is the fifth EIB loan of that kind in support of the two centres’ activity since 2011, bringing the total value of the EIB financing to EUR 1 760m for the five operations (equivalent to approximately PLN 7.5bn).
More generally, the Bank has supported the Polish science sector through 20 operations since 2004. The latest one was signed in July this year between the EIB and the Polish Finance Ministry to support the activity of the Polish Academy of Sciences with a EUR 170m loan for the years 2019-2020. In that case too, the EIB loan complemented financing by the Ministry of Science and Higher Education.
Italy: Juncker Plan – EIB lends EUR 250m to ENEA for research into clean fusion energy
– The project is guaranteed by the Investment Plan for Europe and is being co-financed by EUROfusion, the EU programme to produce safe, clean nuclear fusion energy by 2050
– Agreement signed with the Lazio Region will help develop the new international scientific hub in Frascati
– 1,500 new jobs expected, including 500 for scientists and technicians, with an impact of EUR 2bn for the Italian economy
The challenge to produce safe, clean nuclear fusion energy by 2050 can now count on a ground-breaking experimental device that will be built in Italy. ENEA’s Divertor Tokamak Test (DTT) is ready to be launched thanks to EIB financing and the support of the Lazio Region, both announced today. The European Investment Bank will provide EUR 250m worth of financing under the Commission’s Juncker Plan supporting the implementation of the new scientific and technological hub of ENEA (National Agency for New Technologies, Energy and Sustainable Economic Development). This forms part of a total investment of EUR 500m for the facility which will be hosted in Frascati near Rome thanks to the agreement signed with the Lazio Region. The project will also receive funding from EUROfusion, the European Union’s programme to produce safe, clean nuclear energy, launched in 2014.
The whole project was presented in Rome by ENEA Chairman Federico Testa, EIB Vice-President Dario Scannapieco, Vice-President of the Lazio Region Daniele Leodori, EUROfusion Chairman Ambrogio Fasoli, and the Head of the European Commission’s Euratom Research Unit Elena Righi Steele.
The DTT facility has been created to respond to some of the key scientific and technological issues surrounding nuclear fusion, in particular the question of how to control the enormous amount of heat generated. The main financing is broken down as follows: apart from the EUR 250m allocated by the EIB and backed by the guarantee of the European Fund for Strategic Investments (EFSI, the pillars of the Juncker Plan), EUROfusion will contribute EUR 60m in Horizon 2020 funding, MIUR will provide EUR 40m, MISE EUR 40m, and the Lazio Region EUR 25m.
There will be positive implications for global scientific research with respect to existing large-scale projects and for the Italian economy. Some 1,500 scientists and technicians will be involved in the project (500 directly) and the impact on Italy’s GDP will be around EUR 2bn. Furthermore, thanks to collaboration with Italian and European universities and research centres, new generations of scientists and researchers from all continents will emerge.
“This cutting-edge project combining major research, technological innovation, development and industrial competitiveness will have an impact of more than EUR 2bn in pure economic terms. Its implementation is a great success because it will help respond to complex issues concerning the fusion process. It also confirms Italy’s strong leadership in this field thanks to its brilliant scientific community, which has managed to get the most advanced industries involved to create a hugely important sector. Italian companies have already won over EUR 1.2bn worth of contracts in this field”, said ENEA Chairman Federico Testa.
“ENEA’s project has two aspects that are fundamental for Europe: innovation and combating climate change. We must do more in both fields if we wish to look towards our planet’s future with hope and a sense of optimism, focusing responsibly on the long term without fear of the immediate short term which too often influences choices in terms of allocation of financial resources. I am proud that the EIB is providing a large chunk of the financing to support the development of the new laboratories in Frascati”, stated EIB Vice-President Dario Scannapieco.
European Commissioner Miguel Arias Cañete, responsible for Climate Action and Energy, said: “To achieve a climate neutral Europe by 2050, we need to keep investing in new technological solutions. Fusion is a potential source of safe, non-carbon emitting and virtually limitless energy. If we succeed in making a breakthrough in this technology it could significantly contribute to our efforts to make Europe the first climate neutral major economy. Today’s investment decision is one step towards this objective.”