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Luxury watches: the importance of correct valuations

At a glance

  • Sales of luxury watches in the UK have increased by 21% year-on-year
  • Ensuring these precious timepieces are correctly valued is vital if High Net Worth clients are to avoid the risk of underinsurance
  • Zurich Private Clients is a headline sponsor at SalonQP 2015 from 12-15 November

The UK is one of the fastest-growing markets for luxury watches. Figures from the Federation of the Swiss Watch Industry show exports of watches from Switzerland to the UK between January and August 2015 totalled nearly £500 million – a 21% increase on the same period in 2014.

Current and future trends

There are a number of possible reasons why the UK luxury watch market is so resilient. One theory is that wealthy Chinese tourists are taking advantage of cheaper prices across Europe, particularly in the UK.

Another possible explanation could be the Capital Gains Tax (CGT) factor. Paul Davidson, Director at auctioneers Bonhams, explains that there has been significant growth in the market for watches and other collectables that are classed as “wasting assets”, because they are expected to depreciate in value over time, and are therefore not normally subject to CGT in the event of a price increase.

The growth of the luxury watch market is a trend for brokers to follow. Whether your High Net Worth (HNW) clients are buying watches as an investment or for pleasure, brokers can play an important role in helping to ensure these items are kept safe, correctly valued and appropriately insured.

How have we helped – speedy settlement

While enjoying a holiday in Europe, a client discovered that one of his expensive limited edition watches had been stolen, despite having taken necessary steps to protect his belongings.

Upon returning home, the theft was reported to Zurich Private Clients and we immediately began to source a replacement through a specialist high-quality jeweller. Despite the rarity of the watch, we were able to offer an exact replacement, which was hand delivered to the client within three days of first notification.

All of the arrangements for replacement were dealt with in full by Zurich Private Clients, helping to minimise stress for the client.

How have we helped – underinsurance

A client misplaced a very expensive Rolex insured for £21,800.

During the claims process, Zurich Private Clients’ validation established that the client was underinsured, as the current replacement cost was £24,450.

Our supplier partner discount enabled us to replace the identical watch at a reduced cost which was below the sum insured, resulting in a very satisfied client and a reduced settlement amount.

In light of the watch being underinsured, the client used our supplier partner to have her remaining jewellery revalued, ensuring she had the correct sums insured to avoid complications with any future claims.

Correct valuations are essential

4 key luxury watch trends for 2015


  1. Smaller watches are becoming increasingly popular. Many men’s watches have returned to more classical proportions from the average of 44mm to around 39mm in diameter and women’s watches around 37mm
  2. Blue is the new black. A number of luxury watch manufacturers, including Patek Philippe at the Baselworld Watch and Jewellery Show, have unveiled models with blue dials this year
  3. There is increased demand for customised luxury watches, where people add a personal statement to their timepiece
  4. A number of manufacturers have launched watches with ultra-precious stones or materials, including Jaeger’s Master Calendar, which contains an 800,000-year-old meteorite

Brokers should emphasise to their clients the importance of obtaining an accurate valuation of their watches, to avoid the risk of underinsurance.

There are a number of reasons why underinsurance can occur. If a client has inherited a watch, they may not realise its true value. Alternatively, if they bought the watch abroad, the price paid could be very different to the cost of replacing the item in the UK if it was lost, stolen or damaged.

Matthew Schofield, Head of Zurich Private Clients, says: “Watch collectors need to ensure their individual watches and collections are valued accurately, so if the worst happens, they are adequately insured. We work closely with our expert partners, Bonhams and Mappin & Webb, to provide clients with comprehensive valuations so they are protected fully should a loss occur.”

Zurich Private Clients’ valuation service includes the option for a home visit from an expert from Bonhams or Mappin & Webb. They can provide a bespoke report giving full details about the watch being valued, including materials and techniques used, and can help clients make accurate valuations in the future.

For more information on Zurich Private Clients or on the valuation service, please contact your High Net Worth Account Executive or visit Zurich for Brokers.

Zurich Private Clients is sponsoring the SalonQP fine watch exhibition, which takes place at the Saatchi Gallery, in London, from 12-14 November – click here for details.

Image © Getty

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