PARC 2014, an International art exhibition in Lima (Photo: Reuters)
Online art sites do not threaten galleries and auction houses in the same way Internet availability has undermined the traditional movie, book and music businesses, Hiscox said.
But the willingness of younger buyers to make their first purchases over the Internet along with the rapid growth of online sites pointed to the future of the sector, it said in a statement.
"Young collectors are looking for art work which is easy to buy and available at a wide range of prices," Robert Read, Hiscox's head of fine art, was quoted as saying.
"Online art platforms cater for all tastes and budgets, but are particularly effective for those just starting to collect - opening up the art market in a way that is hard to replicate in the real world."
London-listed Hiscox, which underwrites cover for oil rigs, kidnappings, fine art and vintage cars, estimated the value of global online art sales at $1.57 billion in 2013.
In its second annual report on the online art market, in conjunction with market research company ArtTactic, Hiscox projects this figure will grow to $3.76 billion in 2018.
The report's findings are based on a survey of 506 international art buyers on ArtTactic's client mailing list, Twitter and Facebook, Hiscox said.
"Based on these figures, online art buying accounts for 2.4 percent of the estimated value of the global art market, which in 2013 was $65 billion," Hiscox said.
Internet retail giant Amazon had launched its Art portal in the past year and online auction house eBay was reportedly planning a rival platform, it said.
"Significant increased investment into platforms like Paddle8, Artsy and Artspace indicates continued confidence from investors and belief in the long-term potential of these businesses," Hiscox said.
Complementary Buying Opportunities
Online-only sales would not replace galleries, auctions and other traditional sales channels, it said, but provide an alternative buying opportunity and additional revenue stream.
"The findings indicate that online art e-commerce will not exist as a separate entity - it will augment and co-exist with what is happening in the real, physical art world," Hiscox said.
The report did find, however, that future generations of collectors were likely to make their first art purchases online, with almost 25 percent of 20- to 30-year-olds surveyed for the report saying they first bought art online without seeing the physical piece.
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