The financial turmoil has encouraged the world’s ultra-wealthy citizens to put their cash into collectible items rather than potentially riskier equities or bonds, a development that is helping drive demand for high net worth insurance products, according to Chubb Insurance.

“It's typically the ultra high net worth policyholders who are adding high quality items to their collections - perhaps because some pieces are available at a perceived 'bargain' price,” Jamie Keaney, ultra high net worth underwriting manager for Chubb, said in a note.

The comments came after a 7.03 carat blue diamond ring attracted a record bid of almost $10 million at Sotheby’s, the highest figure for such an item on record, while a David Hockney painting, entitled "Beverley Hills Housewife", fetched £5.2 million, a record price for the artist.

However, some parts of the collectibles market have fallen significantly in price from their peaks of this decade. According to artprice.com, a news and information service tracking the art market, prices for Impressionist and Modern art have fallen by about 30 per cent since January, and have fallen by 10 per cent in the first three months of 2009.

Mr Keaney said that his business has seen an increase in insurance demand linked to such items. “In fact, in the past year, we've insured more fine art, jewellery and classic car collections in the £1 million to £6 million plus bracket than in the previous year,” he said.