The Anderson intelligencer. [volume] (Anderson Court House, S.C.) 1860-1914, 1871-02-09
From the Charleston Courier.
Life Assurance.

The recent failures of two life companies in
New York-the "Great Western Mutual Life"
and the Farmers and Mechanics Life"-have
attracted much public attention.
These failures do not surprise rejecting in
surance men. The organization of new COM
panies in that city has been of late years at the
rate of more than one every two months, no
less than nine having been organized in 1870
Too many of these enterprises were started as
private speculations, with little or no regard to
public utility. The special end and aim was to
furnish official position and salaries to men,
too often over ambitious, frequently incompe-
tent, and sometimes dishonest.
The, in some respects, excellent article you
copied few days since from the Baltimore
San, is in error in saying that the "Great Wes-
term" was one of the Youngest, smallest,
and least successful of its class" 1t was orga-
panies in New York its Juniors" At the end
of 1869 only one of its compeers had out.
stripped it in the race for business, and it had
passed by several of its Seniors" We do not
believe that any of its three thousand policy
holders think it was loo small. Neither its
youth, size, nor even competition (ofnecessity,)
had aught to do with its failure; some of its
"Juniors" are remarkably successful, and are
conducting their business on sound principles.
The failure of the "Great..s Western" was
owing to the incompetency of its officials.
There does not seem to have been any fraud On
their part. Its tables allowed a loading Of so
per cent. on net premiums for expenses of man
agement. In 1869 it expended so per cent of
income on this account, and paid on death
claims only III per cent of income, being less
than was paid by the Mutual Life" of New
York, and per cent less than was paid by the
Equitable" on same account, and per cent
less than the average of Companies Of its own
age Among its assets 9S per cent. is reported
as due from agents, and nearly the same pro-
portion is represented by premium notes" and
''loans on policies" Among its liabilities
$4,000 are reported as "due to agents on &C
count of commissions" We have given these
details in order to show that its failure was not
the result of excess of mortality but was owing
to mismanagement-misma OF such
kind that the merest tyro in business might
have avoided.
The failure ofthe Farmers and Mechanics
was owing to fraud from beginning to end.
The Superintendent of Insurance says Chat
large number of false or fictitious entries were
made of policies that were never issued nor
even applied for. The expenses of the Com
pany from the first were enormously large and
entirely disproportionate to the business done"
In fifteen months $6S,OOO were expended for
advertising, printing and stationery. Salaries
and commissions allowed officers and agents
were on q scale that no young Company could
stand.
The New York Under,criter, for December,
says: So,
1--WE have other Companies which, as re-
spects available means for reinsuring their
policies, are no more solvent than the "Great
Western" and suggests "that all such paper
item Companies set their homes in order, and
henceforth be prepared with as much realized
assets we'll in hand as shall be equal to the re-
insurance liability"
We venture to add that among them the edi-
tor would include some of the "old and large"
companies, the writer of the article in the Bal
timore San to the contrary notwithstanding.
We think the article from the Baltimore Sun
tends to an unfair discrimination in favor of
old as against new companies. AS far as un-
healthy increase of business is in question, the
sin is not confined to the doings OF the young
companies We give below tabular state
ment of losses on the ne,0 business of six lead
ing old and young companies in New York,
(omitting names,) compiled from a tabular
statement published by the Insurance Times, OF
New York City, which was made from the
sworn reports of the companies to the Massa-
chusetts Insurance Department for 1879
and %.
Ratio of losses On neac policies issued, in
decemals of per cent:
Age of Years Of
Ay