, 1874-10-25

The President OF the Continental Insurance.
Company OF New York has published = state
mont showing the ba1auce Of profit and loss in
the 5rs-insnrance business for tho twenty years
preceding 1874. Ths number OF companies
whose business is anslyzed is thirty-eigh., some
OF whom have not beon in business during tho
whole Of the twenty years. The ayerage time
Of each IL thirteen years. These thirty-eight
companies, taken together, hare sustained
losses And have paid in expenses (o1clusivs OF
dividends) tbs san Of $2s9. .90s, 654, and have
earned in premiums sail. .29s, ,s69 showing net
loss Of s12.615.2s5. or the wbols number only
seven companies show profit
The value Of this analysis as II indication Of
insurance profits il increased when We under
stand that these thirtyeight companies are al ycl
alive and engaged IN active business and that they
are managed by officers Of extended experience
These are successful in having avoided bank
ruptcy. and in keeping their capital upimpa;red.
though the latter has required in many cases
assessments upon the stockholders. To the net
loss Of These thirty-eighs companies now doing
business must be added tho losses paid By the
sixty-eight companies which failed in the Chi
caso ire, tho thirty-two companies which failed
IN the Boston FIRE, those that failed in the Troy
Gre in 1869. and Ia Portland In 1866 and thus
the aggregate net loss OF tie insurance business
for tho twenty yeArs may be estimated But
even these statistics do no: tell the whole san7s
Thers ue insurAnoe companies failing every
week, without any serious conf.9ration, and the
aggregate Of capital wrecked and sunk ia these,
OF which thera il no of6cia4 record, most add
1azsely to the aggregate destruction Of capital
invested in insurance.
From these facta it will readily be understood
TINT insurance has not been profitable business
in the United States. Even for the period prior
to 1854 the insurance losses, swollen by the
great dres OF New York, Pittsburg, Albany,
Brooklyn, and St. Louis. swept away The profits
OF many years. As insurance is = more trade,
dependent Ike any other uPo1 it's rro6ts, It is
not unreasonable that those engaged in it should
adopt such moasu1ea "a will cu1tail tho losses.
which not onty Gus OF Ill profit, but annually
Apbo2p Ak$o pIopVIloQ Cl kua !NVe8t84 capital
Whom it il clearly shown that during twenty
years the insurance business has been
carried on 1t haAvy loss, is il but natural that
the capital invessed the1eia RhooM b. With
drawn, II ths losaea cannot b lessened. Stock
holders will not continue to pay annual
contributions to maks good impaired oApital
Unless losses can ba reduced. tbs business must
bs abandoned. During ths yaAss Of tha War
some OF the companies made fostunata invest
ments in Government securities, which xsrs OBJ
tanned At low pE1cea, have paid good intarest
and htve largely advanced in value This good
fortune was independent at thn insurnncs tusi-
ness proper; nevertheless it has carried the
safely through serious tiAls. Nor
szo ths advertiesd exhibits Of tho large assets
held BY Insurance companies always 10 b eo1,-
nide1ed ~ the outgrowth OF profit On insurance..
These statements show that thsy ars largely
by liability for unearned pre-
miuma. and in many cases AN the result OF
s1tzz assessments upon stockholders to supply
deficiencies. No one can justly complain that |
n insurance company refuses to do business |
oxcopt when that bu aineaa is profitable, q to |
.ako riaks where tho circumstances a1s such ~ 70
threaten loss inBtend OF profit