As rare whisky has gone up in price 140% in the last five years, there has been an almost tenfold increase in interest in whiskey insurance policies Y-o-Y.
Serious whisky collectors now number close to 1,000 individuals. Auction houses hold two or three whisky auctions a year, with some bottles selling for as much as a million dollars or more.
This rise in prices, as well as the concomitant need for insurance, is also indicative of the changing landscape of alternative investments. As art and jewelry continue their reign atop the list of insured collectibles at AIG, there is significant new interest in protecting watches, cars, and whisky.
Members of the greatest generation may leave a beautiful silverware or jewelry collection. Their children typically sell these and buy fancy watches, sports cars, and whisky. The lower price point allows for speedier collection. Thus, the transfer of wealth is also a switch into another class of collectibles.
Whiskey is the type of collectible – both highly portable and potable – that collectors tend to be overwhelmingly passionate about, and even emotionally attached to.
To wit, although most collections are grouped under specialized blanket insurance coverage, rare or very expensive bottles may be highlighted as line items within a policy. Underwriters sometimes offer a 150% buffer on the up side, to reflect market fluctuations and to create peace of mind for customers.
For more information, please read:
What the Rise in Whisky Insurance Tells Us About the Super Rich | Bloomberg