New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-01-25

couIagement in the responsive mind OF the
ether.
INSURANCE THAT MfY NOT INSURE.
People who Rave property insured will be
repaid by careful study Of the January state
mrnts Of the companies that have issued the poll
cics. Some weeks must cap9e before the state
Supclintendcnt will issue his annual report /;
meanwhile companies that have been fairly
prosperous sill no doubt hasten to place the
condition Of their affairs before the public, by
advertising. since otherwise they are liable to
be classcd with the majority OF the fac under
writer's WHO are known To have lost money
and are anxious to haze little said about it.
In the annual statements tho best foot Is nat
urally put foremost, and the closest study of
them con only obtain approximate Facts rs to
the real condition OF companies. The way IN
which these statements arc prepared does not
NJ all indicate whether the concerns are taking
risks at probable loss or profit. no system yet
devised shows that. The losses resulting from
lou in.,s already finished and closed are, how
ever, indicated in these statements, and may
occasion the stable door To be shut IN some
instances before the horse disappears
Three causes have conspired 10 make the
uast poor year in fire insurance; first. the
low rates at which risks have been taken;
second, increased losscs by fires; third, the
recent decline in value of Government bonds
held by the companies for investment The
last of these causes did not apply to the al
fairs of tie companies IN then statements OF
july /, 1877, yet those showed some surpris-
inQ loses in the first hall Of the year. From
about go of these statements the following
differences may be drawn: The companies lost
in the period named, nearly $h9O0.0O0 more
than they gained; thus reducing their sur
plus about 1873 per cent. Only third OF
them made any profit The losses, with three
or four exceptions. were distributed not very
uncyenly among the two-ihrds; thus indcat-
ing general rather than local causes.
The increase of losses Ivy fires ming the
past year probably exceeded by about 10 per
cent those of 1876. II is Il well-l,nown fact
that losses always increase, especially upon
stocks OF goods insured, during depressed
periods in mercantile business. But although
the inccndiary has most certainly lit con-
siderable portion OF the fires of the past year,
there have been no great ones during that
time m the United States. The destruction
Of tw0-Gftocnihs Of insurance surplus during
a half year when no large city or town suffered
a heavy loss by fire, must be mainly ascribcd
to the lowering of the rates charged hy. the
companies. Since 1874 the average decline
of rates may he safely estimated ut 80 to 10
Der cent. The rates oil 1874 were adopted as
representing the experience of the companies
AS to what was fair charge 10 cover the
various classes OF risks. There is nothing in
experience since that time to justify the hope
that insured property is less likely to burn
than il was before. There has been some
thing saved by greater economy In manage
ment, hut the bulk Of the increased loss has
been taken ont OF the surplus. Consequently,
two-tlrls Of the companies are less capable
of meeting their obligations.
Some OF the instances related Of the reduc
ton of rates under the pressure Of compcti-
ton. seem almost incredible. In one case. a
conservative company in this city had been
iosuripu certain property ut 81 30 per 800.
The owner urged the company To take larger
no,tion Of the risk this was declined, unless
n rate of So would be paid on the additional
amount. Thcrtupon the owner made applica-
ton elsewhere, and found reckless company
willing to take the whole risk at 20 cents on
the 500. What are called "lOng term pol
ices. exhibit, in many cases, almost as sur
prising rccklcssncfS. They were originally APP
plied only TO dwelling hOuscs on which the
rates were low, and the expense of procuring
the business proportionally high; so that it
WAS not absolutely Improbable to accept two
annual premiums in advance, as payment for
three years risk, or even three premiums
for five years. But latterIy this practice
has extended TO almost all kinds OF
risks, and the figures arc based upon
the excessively low rates now rccailinS. 1t
is quite certain that the people who are pay
ING ;hege small rates are getting small lnsur-
oncc. and it may not need the excuse of
large fire to bring such reckless underwriters
70 bankruptcy. The public cannot be expected
70 nav much attention to this matter. The
Superintendent has no means of ascertnining
il ill the mischief is fully accomplished. Even
if the company go into receivers hands, the
mast methods of doing business are rarely if
ever examined. The persons who can and
should investigate are the trustees. Much
more will be expected now than formerly of
the trustees of stock companies. They will
have TO find out how the business is done
which they are supposed to manage Perhaps
before the present year ends, there may be