Morris tribune., 1886-02-17
FIRE INSURANCE IN MINNESOTA.

State Insurance Commissioner Me
Gill has prepared II statistical table
for the year 1850 which is worth some
puhlic attention. 1t details Il list of
about o0e hundred and thirty-tive in
surance companies doing business i'll
Minnesota. The aggregate amount OF
risks written was $203, 1861 ,03l. The
magnitude of this sum is better real
lied when it is remembered that it
reaches more than half the entire AS
sessed valuation of the state. The to-
tai amount of premiums received was
$2,769, ,030, the average annual premi-
um rate being 1.S4 per cent. The to-
tai amount of losses incurred during
the year was 81, ia, ,492.
The ratio of losses to premiums was
Al per cent. That is to say, the COM
panies paid back 50 for every IS they
received, In view of these figures it
is interesting to know that insurance
men have repeatedly asserted that the
companies have been losing money in
Minnesota for years. We do not care
to question the truth of the assertion.
We merely desire to say that when
| taken in connection with the foregO-
ing figures it furnishes an instructive
commentary on insurance methods.
Insurance is form of communism.
| 1t distributes the losses of individuals
among all the insured. The conrpan-
| les provide merely the machinery for
the collection and disbursement of a
fund. The fund required fordisburse-
ment in Minnesota last year was less
than 81, $780, 900. But the fund collect
ed was about $2,270,0OO. AS their pay
for acting as agents in this communis-
tic operation, the insurance companies
have retained three-fifths of the sum
collected. The enormous number of
competing companies keep in opera
ton twenty times as much machinery
as is necessary to transact the busi-
ness. And the people have to pay for
| the maintenance of all this machin-
cry. Suppose there was single CEN
tral agency for the collection and dis
tributIon of this yearly fund for state
insurance against fire; does any. one
suppose the people would have to pay
ont nearly three millions in order to
| get back one million? 1t is true that
the one hundred and thirty compan-
les represented in Minnesota do not
maintain each its separate establish
ment. The leading local agencies
represent a number of companies.
But it is perfectly obvious that the
principal cost of insurance is due to
the unnecessary duplication of ma
chinery for the collection and dis
bursement of funds.
The time will come, undoubtedly
when the total volume of premiums
will not be greatly in excess of the to.
tai amount of losses paid; but before
that time comesthe insurance bust.
ness must be reorganized upon u sim
pier and more unified basis. 1t is pos.
sible that Insurance may be assumed
as state function. That it could be
managed by the state III such way
as to produce surplus revenue and al
the same time reduce the cost of in
surance from one-third to one-half, i;
reasonably certain. Our American
progress in the direction of state So
cialism as yet falls far short of the in.
corporation of insurance into the busi.
ness activities of the commonwealth
but we are becoming socialists. in the
proper sense of that word, so rapidly
that stranger things than state insur.
ance may be expected.-Minneapolis
Tribune.