New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-09-28
When the full disclosure is made Congress
cannot refuse to act.
FIRE INSURANCE RISKS.

FIRE INSURANCE hoho.
The withdrawal of some Philadelphia com
NAMES from agency business in this State, anu
the general unanimity of New-York ana 1or-
e;pn underwriters in declining further risk In
Chicago. give interest to some general estl-
mates of profit and loss in insurance business
during the past twenty years. we are IN
debted for the facts to a circular sent withih
a few days by Mr.. Geo. L. Hope, Presl-
dent of one of our best managed insurance
companies, to its agents.
Analysing the business of thirty-eight COM
panies during the period named, and includ-
ing an average of thirteen years apiece, it is
round that, aside from all dividends and COM
pensation to stockholders, these institutions
have paid for losses and expenses S2S3'9oo,-
653 70, and have earned on premiums received
$271, 293 1858 80, showing loss in the business
of more than $12,eOO,OOO. These are the COM
panies regarded as most ably managed and hav-
ing an extended experience and they are those
that have survived when many smaller or less
fortunate concerns have withdrawn from bust
ness or sunk in bankruptcy. This estimate
takes no account of the losses of the one humid
red insurance companies that were wrecked
in the great fires of Chicago and Boston, and
does not at all furnish measure of the total
loss of insurance capital during the two de-
cades. But it shows very clearly that the
business has been Improbable on the average,
even to the more fortunate and more ably
managed concerns. Those that have PAID dlvi-
dends during this period have In many in
stances made their profits from judicious in
vestments Of their capital and reserve-prin-
cipaly in Government securities since 1861.
In considering facts like these, it is very
natural to attribute them mainly to the de-
vastation at Chicago and Boston, and to re-
gard the fires there as unparalleled and excep-
tiOnal. But we have no guide for the future
in these matters except in the history of the
past and in reviewing the record since 1885
we find at least ten fires of such magnitude as
to lead to the humiliation of insurance COM
panies-an average of one conflagratiOn every
four years, and including some that were ex-
ceedingly destructive, such those of this
city in 1885 and 1885, OF Pittsburgh in the
latter year and Albany in the year following
of Brooklyn in 1s4S, st. Louis in 1849, Troy
in 1862, Portland in 1866, and the frequent ex-
periences of California cities. There are, in
addition to the probability of an average ex-
perienGe, the new dangers to be anticipated
that spring from tile manufacture and general
use of petroleum products and friction matches,
the greater hight of modern buildings, and the
larger accumulatiOns of stocks of cOmbustible
materials. For while it was hoped that new
inventions and Improvements in the art of ex-
tinguishing fire had kept pace with these in
creasing perls; but Chicago and Boston de-
monstrated that great fires are as much as ever
beyond human control.
Against great as well as against small fires,
therefore, our insurance companies must pro-
vide. 4 They must select their risks with
greater care and divide them more widely,
keep down their expenses, withhold their div
idends, charge rates that really cover both
large and little contingencies, and lay by an
abundant provision against serious disaster.
To accomplish this certain unanimity OF
action is requisite, and the recent general with
drawal. from Chicago risks indicates that it
may be possible to agree equally well in other
details of business. That movement has al
ready awakened Chicago to its need of reform
and will probably go far to effect it. Should
it prove successful in this instance, this action
of our insurance companies may prove the
prelude to measures of municipal reform in
more than one city where political influences
have hitherto mpeded it.