Recently, a wealthy couple was out to dinner when their phones buzzed with alerts that their home security alarm had been tripped. The intruder was gone by the time they got home, but the couple discovered that something else was missing: A 400-pound safe from their second-story bedroom.
It’s unlikely a lone burglar, even a powerlifting thief, picked up the safe, carried it down the stairs, loaded it into a vehicle, and drove off. Stealing the safe required more than one perpetrator, equipment, and some careful planning.
That might sound like a scene from “Ocean’s 11,” but unfortunately for Chubb, the couple’s insurer, it wasn’t fiction. Chubb paid $1.1 million to replace more than two dozen valuable pieces of jewelry, personal documents, and cash that was stored in the missing safe.
The theft is just one example that Chubb has used in materials sent to clients, alerting them that their collections might be at higher risk than they think. Regardless of the dataset used, property crimes, including burglaries, have plunged over the past three decades. But the nature of some property crimes has changed in recent years, Chubb has observed. Burglars are scaling homes and entering second-floor windows, which tend to be less secure, and arriving prepared to break into a safe with professional tools, or remove it entirely.
“When you look at the burglaries and how sophisticated the burglars have become, it does require some level of planning and it's not one person who's going to be able to, I think, pull off a job,” Tannie Ng, a vice president and manager of fine art, jewelry and valuable collections at Chubb Personal Risk Services, said.
Along with cash and diamond-encrusted necklaces, thieves are as happy to find luxury watches. This spring, the Bloomberg Subdial Watch Index, which tracks prices for the 50 most traded luxury watches, had fallen 8.7 percent in a year and 42 percent in two years. But the average watch was still fetching $33,558 and certain timepieces remain in high demand and are appreciating in value.
The Patek Philippe Nautilus 5711/1A, labeled “the most coveted watch in the world” according to GQ, retailed for over $30,000. But a years-long waitlist caused it to trade in the pre-owned market closer to $80,000 — and that was before the brand announced in 2021 that it was discontinuing the model. Now, it sells for over $100,000 and certain versions, like the 5711 1A-018 "Tiffany Blue," have sold for as much as $6.5 million.
Other watches have spiked in value, too. The Audemars Piguet Royal Oak 15500ST retailed for around $26,600 and secondary market prices were closer to $50,000. The Rolex Daytona 116500 Cosmograph also doubled in price; retailing for around $14,800 while pre-owned ones were priced over $30,000, Chubb has reminded clients.
During the Covid-19 pandemic, more watch wearers became enthusiasts and more enthusiasts became collectors. Growing demand and articles elevated the profiles of certain brands, driving up prices. Ng understands this as well as anyone. Her professional career of almost 20 years has required her to know about the markets for luxury items (Chubb is the largest insurer in those categories for high-net-worth families and the top one for U.S. billionaires, Ng said). During the pandemic, like many others, she also started collecting watches and experiencing changes in the $79 billion luxury watch market (30 percent of which is pre-owned sales).
Many people have heard of century-old luxury brands, like Rolex or Cartier. But even relatively new brands, which are far less likely to be seen in-person, have become well known.
“Richard Milles are watches that are very easily now identifiable. Everybody seems to know what a Richard Mille is, that it's a very valuable, six-figure-minimum watch," Ng said. Criminals included, she added. "But then again, Rolexes, Patek [Philippes], all of those have just become very mainstream in that way.” In 2022, the number of watch thefts reported to The Watch Register, a global database for due diligence and crime prevention, were up 60 percent.
The Bloomberg Subdial Watch Index might go up and down but the momentum of the luxury watch market can’t be denied. The pre-owned market is projected to grow from $23.7 billion in 2023 to $35 billion by 2026. Third-party sellers such as WatchBox, Chrono24, and Watchfinder are making it easier than ever to obtain one and their values will likely grow.
“Watch values for a lot of the secondary market models have come down since the peak of 2022. But the reality is also a lot of these watches are still selling for significantly more than what they're going for at retail price. And we know at retail you can't access the watches. There are still waitlists,” Ng said.
How owners protect their watches and other goods also needs to be dynamic, Ng says. Chubb stresses the importance of not relying on homeowners insurance (which often only covers $5,000 worth of luxury items) and getting valuable article coverage and itemizing things instead.
“Insurance is maybe not the first thing collectors will think of for their collection. We're typically very excited about the chase, and the next piece we're going to buy, and the next piece we're going to add to the collection or lend out. But insurance really is one of those things that does become really important. Especially as you're building a collection, you want to think about it from a risk management standpoint,” Ng said.
Some collections include “hundreds” of pieces that in aggregate are worth millions. Others might be smaller in number, but owners have been “trading up” for decades; fewer than a dozen watches could easily be worth just as much, Ng said. (Eighty-one percent of Chubb’s clients are collectors of fine art, jewelry, cars, wine and other valuables, 62 percent say they have a passion for what they collect, and 38 percent see it primarily as an investment.)
But having layers of protection is critical so that watches aren’t stolen in the first place.
To deter thieves and prevent successful burglaries like the one described earlier, Ng and her colleagues recommend layers of protection. A home should have a central alarm system, including motion and glass-break sensors, throughout it (not just the first floor). Then, if a thief gets past that, they should face another tough challenge. Valuables, Chubb recommends, should be kept in a safe that is professionally bolted and weighs over 750 pounds. The safe should also have a minimum TRTL/TL-30 rating, which means it would take someone with experience and professional tools at least 30 minutes to break into it.
“We also talk about alarming the safe in a separate [security] zone. We did have a client who alarmed their safe, and that's actually what triggered their alarm system to go off because their initial perimeter alarm system had been disabled,” Ng said.
Chubb, of course, wants to limit the number and severity of claims made by policyholders. Beyond that, Ng is also passionate about reminding clients how special their valuables are. Regardless of someone’s wealth, some things lost can’t be easily replaced.
Building a collection again could be futile. (Locating and retrieving a stolen one could take years of searching and legal battle to get back, see: John Lennon’s Patek Philippe 2499.)
