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Insurance deal for £24 million stolen Turners

Museum buys back title to the pictures and keeps part of the insurance money

The Tate has struck a deal over the insurance of its £24 million pair of Turners, which were stolen while on loan to Frankfurt’s Schirn Kunsthalle in 1994. Since they were lent abroad, they were properly insured for their full financial value. After receiving the massive payout, the gallery was faced with a dilemma. If, as it was hoped, the paintings were recovered, then the £24 million would have to be returned to the insurers, and this meant it would have been unwise to have spent the proceeds. But as the years dragged on, the chances of a speedy recovery looked increasingly remote. In an unusual arrangement for a museum, the Tate sought Treasury approval for a special arrangement which was negotiated with the insurers, Axa Nordstern and Lloyd’s syndicates, headed by Hiscox.

We can reveal that after lengthy negotiations the Tate has now bought back legal title to “Shade and darkness” and “Light and colour” from the insurers for £8 million. This price is interesting—reflecting the perceived chances of a recovery, fears that the paintings may have suffered damage and the fact that the insurers would receive an immediate sum of capital (rather than waiting an indeterminate time for a recovery). As the Tate’s latest annual accounts state, the Turners “are unlikely to reappear in the near future”, although stolen works “normally reappear eventually”.

By last year the £24 million originally received by the Tate had been invested and had grown to £31 million. This meant that even after the £8 million payment for legal title, the gallery still had £23 million left, virtually as much as it had originally received for the loss. One option would have been to try to buy replacement paintings. The lost works were, however, among the artist’s masterpieces, and it would be very difficult to find similar Turner paintings of this quality to buy. Consequently, a decision has been made to use the insurance pay-off for the care of the collection. The trustees decided that £7 million should be used to buy the freehold of the gallery’s storage facility in Southwark, which will save the annual leasing costs. This still leaves the Tate with £16 million from the insurance pay-off, which will increase with interest.

Immediately after the theft, the insurers offered a $250,000 reward for information leading to a recovery and this money is still available, although now it would come from gallery funds. Loss adjuster Tyler & Co has also been retained by the Tate to work towards a recovery. Tate spokesman Sandy Nairne says he remains “hopeful” that the lost Turners will eventually be returned.