Most of us have, at some point, been ‘over-insured’. That’s a situation we find ourselves in due to overlapping or duplicate insurance policies or when we are paying for insurance cover that is much higher than the value of the potential loss. While it’s safer to be over-insured rather than under-insured, it is always far better if the premiums we pay reflect an accurate value of the item or asset we are insuring. So, it was interesting to read a report from Morgan Stanley published last month on the value of Swiss watches on the secondary market. (click here to read the full report).
The third quarter of 2023 was the sixth consecutive quarter in which the prices of watches on this market have decreased. The last peak was in May 2022 and prices are now down by -5% quarter-on-quarter. While the data, which is provided by WatchCharts the market research platform for pre-owned watches, is heavily weighted toward Rolex, Patek Philippe and Audemars Piguet (‘The Big Three’ brands), the report makes clear that the sequential decline can be attributed to all brands. Undoubtedly, the individuals who purchased their luxury watches prior to May 2022 will have taken out insurance policies to guard against theft, damage or loss. Which begs the question – are they now over-insured and is this leading to inflated premiums?
It’s important to us at KoverNow that premiums are fair, that the data on which we base premiums is transparent, and that our cover is accurate. That´s why we are constantly updating our product databases with the current market value of the different items. Each month, these are assessed and adjusted to reflect the current value with premiums decreasing or increasing accordingly. As a result, none of our luxury watch insurance customers, or indeed those that own high value bags, jewellery or cameras are ever over-/ under-insured.
Morgan Stanley are reassuring in their assessment of the secondary watch market, stating that they believe an underlying demand remains strong and the value retention of these luxury items will be high. Whatever the ups and downs of luxury watch prices, our customers can be sure that they will be accurately insured for the right value.