The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1878-05-30
IPubIished by request.l

Fire Insurance Rot u Rhine Of Profit.
The prevalent notion that fire insurance,
as business, is compensatory to the capital
employed is fallacy which experience,
based on facts and figures, can easily eX-
plode. Because certain companies, still
alive, may be able to make a good
present showing of assets in hand and
OF fair dividend IN past years, the pub
tic Jumps to the conclusion that the
business must be essentially protita-
BILE. Nothing could be further from the
truth. That there remain in existence SO
many sound companies, and that their re-
record has so fair seeming Of prosperity
is, indeed, gratifying. But to infer there
from that profit or prosperity is charac-
teristic Of fire-underwriting involves the
convenient but unfair forgetting OF an
enormous wreckage Of in surance capital in
the case Of hundreds OF companies borne
under by disaster-to say nothing OF other
millions Of enforced assessments to repair
and right many OF the companies which have
thus far weathered the storms.
There are sour periods in the recent his
tory OF fre-underwriting which remain
painfully memorable to the profession, how
ever easy it may be for the public to forget
them. At the end OF 1S66-the year OF the
Portland fire (Which, it is timely to remem-
ber, gave single frisky 1re-cracker the
chance to destroy ten million dollars
worth OF property, the local and other State
companies reporting to the New York In
surance Department had to confess an i'm
pairment OF capital aggregating nearly
So, 900, 900, after losing, besides, whatever
surplus they had previously accumulated.
After the Chicago fire of 1871, which
swept of S50,O00,O00 Of insurance capi-
tai and utterly destroyed sixty-cight
companies, whose. capital and surplus
reached S24,S67,109, many OF the sur
yivors were forced to weep over the
wiping out OF all their surplus funds, and
others to repair breaches Of capital amount
ing to from $4,000 up to as much as
| 81 900, 900 in one instance. Then, in the
next year. came the Boston unpleasantness,
which brought eternal grief to thirty-two
companies, and absorbed total OF S31 ,O0O,-
| 600 OF insurance capital. And, finally, we
have the more recent episode OF st. John,
where SG,5SS,000 Of insurance money was
so effectually cremated.
Here, then, are four lurid spots in the latter
day annals OF the business which cost lnsu-
rance companies about S100,000,000 to wipe
out, thereby discounting at swoop all hope
OF profit for many year. Meanwhile, too,
the depicting process has gone on at the
rate OF S40,000,000 to S50,000,000 year,
apart from these exceptional but not lmpro.
bable confiagrations. That any compa'
mics are left alive to tell the tale is OF it.
self wonderful fact, especially when the
low rates, the business depression, and the
fierce competition are considered. TO talk
OF such business being mine Of profit,
under the circumstances, is simple non.
sense. In point Of fact, capital thus invest
ed is and must be most precarious ven.
ture, even when adequate rates prevail
Only by the most skilful and vigilant man.
.agement can fire-underwriting be made to
pay its costs, and then only in combination
with degree Of good fortune which even
utmost skill cannot command.
For some years past 1t has happened that
New York has been exempt from sweeping
conflagrations, and to this fact is due the
temporary exhibit Of prosperity made by
most OF our local companies. But the great
New York fire is bound to come, sooner OF
later, which will bankrupt scores OF this
class OF offices and send the mourners about
the streets. Pending this possibility, it will
be wise to Judge the business and its profit
ableness less by the large dividends certain
companies are making out OF old surplus AND
rather more by the teachings OF experience
and the losses which the near future may
have in its keeping. York; Bulletin.