IE thought we would take a look at how the luxury watch insurance sector is being disrupted.
For decades owners had their receipts and paperwork in boxes, sometimes took photos of them, plus the watch, or added a Rolex, Omega, Audemars or Patek to their house insurance via a specialist insurer. As a broker, you often needed detailed knowledge of watches to offer a realistic quote of course, especially on an entire watch collection, but that longstanding tradition of brokers using jewellers shops or watch experts as valuers, and offer handwritten certificates of authenticity on vintage watches, is changing.
Digital passports for watches are gradually replacing the fiddly model number cards, service receipts, holograms, leaflets and other paperwork that typically come with a new Breitling, Rolex, IWC, Jaeger le Coultre or Richard Mille.
In fact, big name manufacturer Vacheron Constantin announced in 2019 they were ditching old school paperwork and offering digital passports on new watches. Mainstream manufacturer Breitling announced in October 2020 that all their new watches would now have a blockchain-backed digital ID at the point of sale. This, say the watch manufacturer, will allow owners to resell more easily because the watch can be authenticated in seconds. Plus it will also show the service history – or lack of it. From an owner point of view, the move does make selling your watch privately, or to an indie watch dealer, much more difficult, since an individual cannot register the Breitling onto the ID scheme, only authorised dealers can.
For insurers, such schemes open the market up, since a simple online check can establish the value of the watch, you don’t need an expert to check that the correct bezel has been fitted, the strap is non-original etc. Plus you can see on Watchfinder, Chron24 or other auction sites what those Rolex Submariner models, from that particular year, with that exact spec, are fetching on the pre-owned market.
Last year saw Origyn app launched, which lets owners upload a smartphone photo set and thus verify the watch in detail, condition, strap, box & paperwork etc.
“Origyn offers a digital certification system that allows any user to authenticate any luxury product immediately with a high-resolution photo taken with a smartphone,” said Vincent Perriard, a co-founder of Origyn and former chief executive of the watch brand HYT. The company plans to introduce the Origyn app in mid-2021.
Interestingly, Origyn allows future owners to add their photo archive, so a blockchain tracked history of the watch is on file. Again for insurers there is an opportunity to partner with online platforms, or leading auction houses, so that the photo history can be searched and a real-time price on overall risk established. Then you could offer the new buyer a quote as part of the seller’s receipt email maybe?
THE SUPER RICH WILL EMBRACE DIGITAL TRACKING
Meanwhile Helvetia Insurance partnered up recenly with Adresta. Although this deal does only apply to residents of Switzerland or Lichtenstein.
How does it work? Adresta digitizes the life cycle of luxury watches. All important waypoints, like POS, or service history of a watch are made available digitally for manufacturers, dealers and buyers. Every watch whose manufacturer is a partner of Adresta can be unequivocally identified and verified as an original. At the same time, counterfeits and stolen goods are recognized on the watch market and excluded from it. For this purpose, the start-up creates digital certificates that are secured by blockchain technology. Adresta thus ensures security and transparency, especially with second-hand purchases.
The race is on as regards partnerships between manufacturers and app-creators when it comes to digital ID for luxury watches. Brands really want this new technology, as it helps them ring-fence the resale and repair of their luxury goods by offering consumers the guarantee that the watch is NOT a fake – very important with Rolex, Cartier, Hublot, Franck Muller and many other brands that counterfeit producers love to imitate.
The shrewd insurer or broker can find new business by building an online eco-system to integrate these new tracking and authenticating systems into its insurance product. Watch collectors want a fair valuation for theft or loss, plus authorised repairs if the watch is damaged, but repairable – which are uploaded into the watch history held online. In that regard the Swiss watch insurance market is playing catch-up with the car insurance market, insurers are often stuck in the papertrail past, some high net worth brokers too.
Those who build a trusted online watch insurance brand will win new – and often very wealthy – customers in 2021. Time is ticking.