Soaring gold prices are pushing vault insurance to its limits and forcing insurers to rethink accumulation risk

Gold’s surge to record price levels is triggering an unusual squeeze in the 'specie' insurance market: it’s not that vault operators suddenly want less protection, but that the same physical pile of metal now represents a much larger insured value - often brushing up against, or exceeding, the maximum limits the market will reliably deploy to a single storage location.

What vault operators are changing (and why it matters)

Brokers recently told the Financial Times that available cover for a single storage location has risen in recent years — from roughly $3bn to as much as $5bn — but that the gold rally is still outpacing insurable capacity for many sites:

As a result, operators are adapting in three main strategies:

1. redistributing bullion between sites to stay below per-location caps;
2. 'location engineering': moving metal between multiple buildings on a single industrial property, where policy definitions allow those buildings to be treated as separate insured locations; and
3. self-insuring a growing slice of the exposure, especially among mid-sized custodians who previously sought to insure 'every dollar'. Large bullion banks have long held values beyond the London market’s practical capacity and carried that risk on balance sheet, but this behaviour is now spreading. 

The insurer implications: Less about theft frequency, more about severity and aggregation

For insurers, the immediate headline is not a spike in day-to-day claim frequency, it’s the return of extreme tail risk and capital strain driven by higher insured values per site and more complex accumulation dynamics. 

For insurers underwriting vaults, bullion banks, and precious metals logistics, the gold rally is turning what used to be 'nice-to-have' disciplines into core underwriting requirements. 

1. First, accumulation management is becoming non negotiable: as clients redistribute bullion across buildings and sites to stay within per location limits, carriers need higher frequency reporting, clearer stock schedules, and stronger aggregation controls to prevent 'silent' concentrations of value building up outside expected tolerances. At the same time, policy language is taking on outsized importance, especially definitions of 'location' and 'occurrence', because small wording differences can materially change how much value is deemed to sit in one place (and therefore how much can be lost in a single event), which directly affects pricing, attachment points, and how towers are structured. 
2. Risk is also shifting toward transit: brokers have highlighted that bullion is often most exposed when it is being moved, and rising volumes and values are driving more demand for specialist transit cover. This creates premium opportunity for insurers, but also concentrates loss potential around handoffs, chain of custody controls, and security protocols in motion rather than at rest. Inside the vault, employee infidelity controls are likely to receive sharper scrutiny as well, given industry commentary that a meaningful share of specie losses involve insider theft, pushing underwriters to focus on vetting, access controls, segregation of duties, monitoring, and audit trails as rating-critical features. 
3. Finally, even where headline market capacity exists, it may not be evenly deployable: reported specie capacity (including in the Lloyd’s market) can look large on paper, but how much limit is actually available to any one site depends heavily on risk quality, structure, and reinsurer appetite. This can encourage more layered placements, higher attachments, and tighter security warranties as values continue to climb.