The New York herald., 1872-12-08
INSURANCE.:
4 FEW FACTS ABOUT LIFE INSURANCE.


There is no reason to believe that the Mutua,
Lue company IN proposing to lessen the rates Of
lie insurance., Is obstinateiy bent on insurng
people only at the lower rates No doubt 1t Will
hereafter continue to insure at the higher or
present rates any one who insists upon paying
these, ana Will keep, as it can easily do. the
accounts separate OF the higher and lower rate
policy holders. Then those who pay their money
can have their choice. II you will inquire at the
companys ONCE no doubt they will tell you that
they can and will do this.
There Is no reasen why insurer who wishes
to pay more than ia needed to insure him should
not be gratiGcd; Dut as everybody IL not fond of
overpaying 1t Is also worth while to let those have
chance VINO desire to pay no more than is needed
for safety. This the Mutual Life now proposes
to do.
Eighteen other companies seem to have been so
alarmed at this step OF the Mutual Life that aban
doning their own paid actuaries, they have re-
tanned three gentlemen, who call themselves 'con-
sulting actuaries" to tell the public what they
think about it. A consulting actuary" is prob
ably like consulting lawyer-he thinks what his
employer thinks; and what the eighteen employ
ers OF these three 'cOnsuting aetuaries" necessa-
rtly and unavodably think OF proposition to re-.
duce the rates OF life insurance anybody may Judge
from glance at the following tables. which show
from official reports: first the ratio between re-
ceipts and expenses in the eighteen companies
and in the Mutual Life for three years past, which
OF course shows the comparative economy of man.
agement; secondly the percentage OF claims by
death on amounts insured. which shows the com
parative care with which risks have been taken:
and lastly, the proportion which unreazed assets
bear to total assets, which shows how closely or
loosely the companies have done business, unreal
tied asset heinp mOnevs due but not collected
1t appears from these official figures that
Frst-If the expenses OF the Mutual Life had
been as great in only the last three years as the
average (3O.5n OF the eighteen companies who do
not like its present action 1t would have paid out
81. 73O, ,s62 mere than it did pay for working ex-
penses-a monstrous sum, nearly as great as the
total expenses OF the Mutual Life during the whole
thirty years OF It's existence.
The Mutual Life, 1t would appear from this, may
safely insure for lower rates, because as these fig
ures show, its management Is and has been more
economical than that OF the eighteen companies
who complain.
Second-If the claims by death in the Mutual Life
had been as great as the average of the eighteen
companies who attack it's course 1t would have had
to pay in 1871 $5S0,67l more than 1t was actually
called upon to pay for death losses If these figures
are correct the Mutual Life may safely insure for
lower rates. because It has used greater in Sc
ecting lives than the eighteen companies who COM
plain OF It,
Third-In every large business there are neces-
sarily unsettled accounts and incomplete trans
can do business most economically who has the
fewest OF such unsettled and outstanding accounts.
Now, in this or the total assets or the Mutual
Life Company three per consist OF balances due
from agents, uncolected premiums and the like.
The average per centage OF the same ''unreazed
assetsn In the eighteen companies is, according TO
these Official figures, little over seventeen per
cent. If the Mutual Lies affairs were managed as
these figures would indicate the other companies
to have managed theirs 1t would to-day have
nearly nine millions OF its fluids outstanding, and
therefore to q certain extent in peril
Fourth-But the first table below shows that
looking TO the difference In the rates of expense
between the Mutual Life and the average OF the
eighteen companies which attack il 1922 for the
Mutual Life and 3o.5l for the average of the oher
eighteen companies), the Mutual Life can do bust.
ness on the proposed lower rate--twenty per cent
reduction, namely-and yet continue to return to
the new policy holder as large dividends as the
average of these eighteen companies.
1t should be known that the figures in the follow
ing tables are taken from the sworn statements OF
the different companies to the Insurance Commits
sioner OF Massachusetts They are, or course in
tended to be correct and are believed to be SO.
RATIO OF EXPENSES TO RECEIPTS