New-York tribune., 1872-12-02
LESSONS IN INSURANCE.

COMPANIES RETRIEVING PAST ERRORs-RIsKs TO
BE SPREAD OVER A LARGER AREA, AND SAFE
RATES TO BE NEUTRALITY-SUSPICIOUS. PRE-
DICAMENT OF A CITY COMPANY.
The recent disastrous fires in Boston, Brook
yn Jersey City, and other places have called attention
TO the frequent and almost Irregular Of large
fires In this country. Such oalamities the burning OF
good part OF Chicago and large section OF Boston are
exceptional cases. the fact remains that for some
unexplained about every fifth or sixth year Is
disastrous with fires. Tho disasters which nave
oyertaken so many OF our insurance companies
are traceable directly to q non-observance OF the
laws which should govern their business. The
latter I, part OF tho year 1865 and the whole
Of the year 1860 trying for insurance compa-
MES. There was OF large and destructive fres
extending throughout the United States the last notable
one being that which destroyed the large building occu
pied By s. b. Chttenden Co.. dealers in dry goods at
Leonardst and Broadway aud which involved loss Of
moro than The years 1867 1863 and 1869 were
comparatively free from largo fires and there was not
an unusually largo number in 1870 In 1871 there was
an unusually large number OF destructive fires
including those Of Chicago and the woods OF the
Northwest. The rates Of insurance, which had been
advanced % per cent in consequence OF the Chtenden
FIRE. were subsequently reduced from time to time UNTIL
on the occasion OF the Chicago fire, they were at the
lowest limit Moro than this many OF tho companies, In
their eagerness large lines Of particular class
Insurance. such for instance, warehouse or short
time risks, and lines Of insurance dry goods had
allowed drawbacks amounting, in some instances to
from 80 10 40 per cent Of the amount OF premium
received. In addition to this, from Is to 20 per
cent commission paid TO agents and others. 1t was
the policy of the large companies to crowd out the
smaller ones To accomplish this unremuneratiye rates
were adopted and the smaller companies. in many cases.
followed the example from desire to retain much Of
their business they could under the circumstances
Tho English companies with capitals ranging from
Is to s0OOOOOo also added TO the decentralization
by taking larger lines than any OF the homo com
panes, those Of Hartford not excepted
of prosperity widespread and when
insurance companies, or which 80 were In TINS ey
and crippled large number OF others Inc Lorlllar
with capital and surplus OF 81 100000. swept
out OF existence; the Liverpool, London, and
Globe paid losses aggregatng $4,000 and the Home
or two others paid more than 100000 each.
ton assembled soon after this disaster advanced the
rates of Insurance from 90 to per cent. And yet in
spite 6f the warning OF the past in less than three
panes gravating toward the old ruinous rates.
by fame. despite wedirected preventive efforts. did
not have the effect OF inducing the companies TO
foregO their policy OF taking risks aggregating
more than their entire capital and assets, within com
paratiyely small area Aud this was the state OF affairs
"a insurers and insured has already been told IN TIE
TRIBUNE Nearly all the Boston companies were ruined
cago companies, IT is doubtful whether the insured VIII
more than % cent or
their policies. Here again, the English cOnpa
nies among the greatest sufferers, the Liverpool,
London and Globe losing S500OO the Queen S7500O0,
and the others in proportion,
AT length the insurance have become fully alive
10 the peril Of taking many risks I'm a small area, and
very many have already begun to weed out Objectionable
risks by cancelng policies, and in other cases by re-
ducing the amount insured. After the experience OF
Boston n felt that there Is possibility that our own
dry goods DISTRICT lying between Chambers aud Grand
ss and west OF Broadway, may be destroyed IL Is the
opinion OF the best informed insurance men that
such a calamity occur il would bankrupt every insu
rance company in this city aud probably threefourths
all those I'm the country Tue officers OF an insurance
company having capital and surplus Of 81 100000 com
peted recently elimination or its books, and made
the discovery that IN this district the liabilities OF the
company aggregated more than sl,00O0O0. The prem-
received Tor this large amount Of risk aggregated
only 5000 The officers now reducing this risk and
viii hereafter carry out the policy Of spread.
ing the risks Of the company over larger
arh, believing that this is the only safe
plan Of conducting the fro insurance business. Others
are rapidly following their example While reporter
Of The TRBuSE was IN the Office OF one OF the down
town companies recently, merchant doing business In
the district mentioned called for the purpose OF procur
Ing policy OF insurance When last Ne injured the rate
wss As cents each $780, with rebate OF 10 per cent I'm
eu OF commission. The present rate he was told was 81
per 500, aud no rebate This was only one example OF
The increase of rates in this city.