The Sun.
London, England, 1861-08-05 00:00:00

no occurrence of similar magnitude, or inflicting a
similar amount of loss, had happened for nearly 200
years. (Hear, hear,) But the event, lamentable
as it is, demonstrates very clearly the necessity of
an ample reserve fund in carrying on the business
of an insurance company, and amply justifies those
warnings, alluded to in this report, which have
been given by the board from time to time in the
reports of previous years. (Hear, hear.) I have
already alluded to the uncertain nature of an insu-
rance business, when we look only at a single year,
or at one or two years together ; and although I
quite agree with the remark made in the report,
that, looking at a large number of years, no busi-
ness proves safer, I also feel that, looking at a few
years only, a reserve fund is absolutely necessary
to give permanence and stability to the dividend,
the very nature of the business being such, that
the losses of one year may sweep away the profits
of a great many years preceding. (Hear, hear.)
The position, gentlemen, obtained by the Royal
Insurance Company, and the promptitude with
which it provided funds for the payment of its
late losses, as alluded to in the report, has not
only added to its reputation, but has already given
an impetus to its progress, and its business has
considerably increased, especially in London.
(Hear, hear.) You will have seen, gentlemen, in
the newspapers, reports of meetings held by the
insurance offices from time to time, for the pur-
pose of considering the position in which they
late
disastrous placed, by an event of the nature of the
disastrous fire. On looking into their business con-
nected with mercantile assurances, all the offices
engaged in that business, in the port of London,
found that the premiums received, taking the aver-
age of the last 10 or 12 years, were not adequate to
the risks incurred ; and they came to the conclu-
sion, which I think was a very natural one, that
the premiums should be brought more upon a par
with those risks. (Hear, hear.) They did not
attempt—as some ofth
raise e Lthoendraotnesmoefrephraenmtisusmee,mfotor
I have supposed—to.
the purpose of creating a fund for the payment
of past losses.. (Hear.), That did not enter into
I their calculation, nor do I think it ought. (Hear,
hear.) But they were certainly justified in looking
to the future, and in taking care, that as far as
possible, the premiums charged, in that particular
department of their business, should be adequate to
the risks whibh the offices were called on to incur.
(Hear, hear.) Now, gentlemen, without reference
to the great fire at all, the premiums previously
received were found not to have been sufficient to
cover the risk, and to pay the past losses, and if
they were not sufficient, when that fire was ex-
cluded from consideration, the insufficiency was, of
course, considerably greater when it was taken into
account. (Hear, hear.) The rates, therefore, have
been readjusted, with the view, if possible, of in-
ducing parties who have produce in the port of
London to classify that produce, and those who
have warehouses to build those warehouses with
better provision for the security of the produce
placed in them. (Hear, hear.) That is the basis
on which the increased premiums were calculated.
(Hear, hear.) The representatives of the insurance
offices subsequently held a meeting, and came to
the conclusion that those premiums might be modi-
fied. (Hear, hear.) They have modified them to
some extent, and I believe our excellent manager,
Mr. Dove, is of opinion that the modified rates will
be found sufficient. (Hear, hear.) I need scarcely
say, either of him or of the board, that we have
no wish to charge exaggerated premiums. (Hear,
hear.) Sueh has never been our policy ; but we do
think, as I have already said, that the amount paid
by the merchants should be adjusted to the risks
incurred. (Hear, hear.) Gentlemen, it is a happy
thing perhaps that a good many of the weak offices
in this country had withdrawn from business before
the occurrence of the late fire. If not, one or two
things must have occurred ; either those weak
offices would not have been enabled to pay their
proportion of the loss, and so the insured would
have suffered ; or, if the proprietors had been able
to meet their liabilities, large calls must have been
made upon them, and great misery must, in all pro-
bability, have been endured. (Hear, hear.) As it
is, I believe nothing of the kind has occurred, or is
likely to occur. (Hear.) You have heard some-
thing, no doubt, of a contemplated new office ; and a
good deal was said lately, at a meeting of the mer-
chants of London, about the exorbitant rates of
premium demanded by the insurance offices, and
about the great success which some offices have
achieved. That there have been such successes is
no doubt true ; but there was one thing which these
gentlemen kept carefully out of sight—l allude to
the number of offices which, within the last 20
years, have given up business—some of them abso-
lately ruined, others because they found themselves
on the high road to ruin. Now, in looking at
what has been accomplished by successful offices,
the fact ought never to be lost sight of that there
L have been other offices which have been utterly
unsuccessful ; and the only proper mode of coming
; to a correct conclusion is to take them all into ac-
count, and look at the average result. (Hear, hear.)
Upon this point I have some very important and
remarkable statistics, which I should like briefly to
bring before you. One of the larger London offices,
the Sun, publishes annually a list of offices discon-
tinuing business. (Hear, hear.) The last issue of
that company announces the total number of these,
during a lengthened period not precisely specified,
as 95 ; while the number of existing companies is
52. But, gentlemen, taking a certain definite period,
which perhaps will be the most satisfactory course,
I find from other sources that, within the last 17
years, 48 new offices have been established, of which
only 12 now continue in existence, showing that
the fire insurance business has not been successful
with all offices, at all events. (Hear, hear.)
This gentlemen, refers to fire offices only ; but if
the life offices are included the fate of the larger
number of these offices must be considered most
extraordinary. lam quite sure you are not pre-
pared for the statistics which I am about to read
to you. During the 17 years to which I have
referred, 580 new insurance companies have been
projected, of whicn, 233 have ceased to exist,
having altogether gone out of being ; 11 have
amalgamated with other companies ; 134 have sus-
pended their business ; and 42 are winding up in
Chancery. (Hear.) I have thought it right to bring
this matter before you, because a great deal of op-
probriuth has been thrown upon companies for hav-
ing raised their premiums as though they were en-
deayouring to extort a large amount of money from
the public to which they are not entitled. I think
the facts which I have given you are sufficient to
show that that imputation has no reasonable founda-
tion. (Hear.) Ido not know that I have any further
remarks to make, but I shall be happy to answer
any questions which any proprietor may wish to
put, and I now beg leave to move " That the report
now read be received and adopted, and printed for
circulation amongst the proprietors."
Mr. SAMUEL HOLME—Mr. Chairman and gentle-
men,—l should consider myself guilty of great
presumption, in a large meeting like this, in rising
to second the resolution which has been put from
the • chair, had it not been for the circumstance
that first I had been requested by several gentle-
men to do so, and next that I had beer. connected
with this institution from its very commencement.
Sir, I do not look upon the seconding of the resolu-
tion as the mere formal matter which it is some-
times held to be ; because I admit the responsibility
of it, and I say that every person who sanctions a
tipoboertaisnsudrordsetshitt, ahnd, sends it forth to the world
With his imprimatur • and the public have a right
to assured
bteaerr)eport we send forth so
adopted,sane-
minneadaannadth. . is one which is a symbol of the
com-
mencement of adopt it,
have ever had a a Now, sir, from the com-
t divi-
dend,eiffeeAbisesuetriaennceteArseseoeciviaitnigonwe
r.:stahraetdwythat such dividend has
IfOutplhliyinosior:s.. of the meeting who do so
unless
been warranted.
—without reference trasne Iph
to the assured, and that nett
ehall bean
eocludntiahrayt
coounrsfiidrestradtniotyn
tshall first give security
it shall be placed upon
of our own—is this
aserecausroitnyaballso to
1 such a basis as that there
the assurers, together with a fair
fit for the risk which the assurers runa,
considerable
sir, from an intimate knowledge of this assurance
company, and from an acquaintance— believe, ep r o .
acquaintance, though I am not a director, with its
details, that the Royal Assurance does offer this in
faith and in sincerity, and that no dividend has ever
yet been paid by this society which has not been fully
warranted by the state of its accounts. (Hear.) Sir,
reputation in public companies is just as necessary to
eventual success as the reputation of an individual ;
and unlimited confidence must be placed by the
pub-
lie in an association of gentlemen, who not only give
eguarantee for the security of the property, but
likewise give a guarantee that this security shall be
perpetual, as far as human security can be made,
for life assurance in some cases may not be payable
for forty years, or in some fifty years to come; and
hence the necessity that it should be placed upon a
foundation which is undeniable and secure. Now,
sir, my confidence in the Royal is unabated ; prin-
cipally on account of knowing the state of its affairs,
and more so from the open, plain, and straightfor-
ward statements which are continually put forth.
And I may just say here that I rejoiced when Mr.
Dove sent forth that pamphlet to the world, clear
and logical as it was, appealing to facts and not to
assertions, throwing down the gauntlet, as it were,
to the world, challenging opinion and criticism—if
criticism were possible—and challenging contradic-
tion to the facts—if contradiction were possible—
which were there put forth. Sir, we have just had
to contend with a calamity, unprecedented, I be-
lieve, since the great fire in London in 1666; and
it has swept away
a large sum—the report states
£70,000 or £75,000. It may be the latter, and this
shows us the wisdom, and the security of having a
reserve fund—(hear, hear)—not a reserve fund