, 1873-01-13
FIRE UNDERWRITING.
It's Early Operations in the
United States.
Progress During TTenty-Ycar
Periods From 1901 to 1870.
The Origin Of the Agency SUPERINTENDENT
Agents aud Brokers.
Thar celatlon to Local Communtties.--State Leg
islation on insurance.

7heir celatlon to Local Communttes...stato Leg.
isat;on on Insurance.
This immense proportions attained BY Fire Un-
dereriting, its relations to commerce, and the
sayere shocks which it has so nobly BEsta med
within the past two years, render it worthy OF a
futler investigation than ia usually accorded.
..hcro ere now in the United States over seven
turdred fire insurance companies, with aggre-
cstc assets Of fully s150, ,o0o, 600. OF this
number ESQ do an agency business, the remainder
bolne restricted in their operations to thoir own
respective localities. The amount paid annually
a. premiums for Fire Insurance is nos far frora
SERENITY FIVE millions. ~~-
EARLY TRANSACTIONS
in this business prior to the Revolution no rec
end exists, but there can be no doubt that some-
thing WIS done in cities and the oldest settle
mepts, By mutual organizations. The Oldest
existing company ia tho hniskerbocker of
New York, which commenced business In
the year 17B7. The Insurance Company
Of North America, and the Insurance
Company OF the State Of Pennsylvania, both of
Philadelpbia, the Equitable Society, snd the
Mutual Insurance Society, Of Richmond, wero
established in 1894. All Of these still in ex-
istcnce and in prosperous condition. The
Washington, Of Providence, Rhode Island. Or
ranized in 1893, and the Norwich, OF Conuecti
cut, 1903, we're among the cor oan1es destroyed
b. the Chicago fire. The Massachusetts Mutual
Fire. Of Boston, founded in 1888, vent down in
the recent catastrophe in that city, having suc
cesafuIly battled With the conhagrations of three
quarters Of q century. Perhaps the most pros-
perous period for fire underwriting was
FROM 1891 TO 1910.
{pclusiye, Besides number Of mutual comrn-
nies, there we're etock companies with capitals
Of s30o, 900 to 81 ,000, ,000 and the business was
conducted in q broad commercial spirit Rates
Of premium we're high, and without any orga-
nizei combination Of the underwriters, we're
uniformly sustained, because they we're deemed
essential to safety and profit, and because it
was considered beneath the dignity Of al insur-
auce officer to obtain patronage by underselling
his neighbor. The following Offices, in addition
to those already named, commenced during this
epoch, and are still in existence:
Providence G.. L. Mutual -1s0o
Union Mutual Of Philadelphia
Eagle Insurance Company, New York l6lb
B1ltinore Insurance Company .lsVi
American s"AoAV
FROM 1910 70, 1880.
The SUCCESS thus far obtained by wholesome
conservatism and tudicious management gave
rise, during tho next twenty yeare q811 to 1830)
to host Of small companies who were unwilling
to acquire patronage by allow processes, and re-
duction OF rates Of premium was the result. a
sc7amble for business eusued, in which the elder
Offices we're compelled to Join, else retire from
A. E.f1 .sr kI.n eF mn
unhealthy competition which has eTer since ex
isted, and at times threatened the de-
struction Of the whole system Of underwriting.
The immediate effects, however, we're not go
disastrous AZ might have been spprehended.
Rates had been heavily loaded, and perhaps they
werc subject to some abatement, and in other
directions reasonable degree Of conservatism
WIS exercised, so that the failure OF some OF the
Younger companies, and q decrease in the sur
plus funds Of older ones, were foz tho time the
worst results experienced. During this term Of
yenrs tho following companies we're organized:
Etna, Of Hartford, Conn., Delaware, Of VIII
mington, Del; American, Boston; BoJ1ston,
Neptune, Manufacturers, Ftank1in, National, and
Washington, OF Boston; Mechanics', Elizabeth
Mutual, and Newark Mutual, OF New Jersey;
Albany, Of Albany, N. T.; Eremen's, Howard,
City; Cincinnati Insurance Company and Fire
mems, Of Cincinnati, Ohio; Pennsy1gAnia IN
eurance Company and Fire Association Of Phila-
dalphia and Vermont Mutual OF Montpelier.
FROM 1880 TO 1850.
Commencing with 1881, the next period Of
trenty years Witnessed an increased compete
ton and greater decentralization in tho busi-
ness Of fire insurance, resulting in terrible loss
nd IT'LL frau sy,N Fcr1r
loss, e15000 600; CHARLESTON, 8. c., 1888, loss,
$4,000, ooo Pittsburgh, 1845, loss, $40 ,ooo, 600;
New York, 1876, loss, Sc, 600 600; Albany, 1913,
loss, s. 600 900; St. Louis, 184s, loss, es, ,ooo-
600 Philadelphia, 1850, loss, 81 ,000, 900, nude
heayy dratte, which tho premium receipts,
greatly decreased by rivalry, were inadequate to
meet, and hundreds Of companies failed Many
millions Of capital were swept ont Of existence,
and tho formation Of new companies was dis
couraged for time. In q country Of rapid
growth, however, so important an interest could
not long be neglected, and about the year 1853
companies began to be organized, and by far
tho largest number OF those now in existence
have commenced business since that dato.
FROM 1850 TO 1870.
The twenty years commencing with 1851 and
ending with 1870 would show in the aggregate
ever, Was more prosperous period than the
second. Summing up the entire results Of eighty
years, there can be no doubt TINT the entire
amount Of pre'niarns received by all the COM
panies have been inadequate to paY the losses
and expenses. This at first may seem incredi-
,be but when it is known that fully ono thou.
.sand companies have failed within that time,
many Of which paid little or nothing upon their
liabilities, it will be seen that the existence OF
seven hundred companies at the present time is
not Inconsistent with the statement that the
business in the aggregate has been Improbable.
The experience OF one hundred leading conpa-
:nies aged from to 80 years, averaging 90 years,
beginning Hith their organization and ending
Jan. l, 1871, is as follows:
tsalo1A Ictelp14.. -S5lo,l l93pV9o
Losses paid. ls6.675,5so
These figures do not include the unparalleled
lossos at Chicago and Boston, and yet it will be
seen that the percentage Of loss has been nearly
~ per cent OF premium receipts. The average I
expenses are IS per cent, which, added to losses,
Fouid leaye the average profit Of one hundEed [