The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1889-11-24
THE PROFIT IN INSURANCE..
How the Fire and Life Companies Appear in
the Report Of the Auditor OF State.

The fact that S73.112 was turned into the
State treasury by Auditor Carr at the close
of the fiscal year as the amount Of tax paid
by the several insurance companies doing
business in Indiana between June 80, 1888.
aud June so, 1889, shows that the year was
a remarkably successfully one for such en-
terprises as we'll as one comparatively free
from loss on the part of the insured, the
losses being much less and the mount of
tax necessarily much larger than for the
preceding year. For the corresponding
period of 1887 and 1888 the amount OF tax
paid into the treasury from insurance ccm-
panies was s54,5 500, or nearly 10000 less
than TOR the past year. The rate of taxa
ton Oh insurance business is three
per centum of gross receipts.
after deducting the losses paid,
and these last year aggregated S2.459,096.
while for the year before the amount was
bnt 1885, .9. showing n large increase for
the period for which the last settlement
was made. or something over s6GO,GO. The
totals for this department of the State
Auditors Office have not been made up Tor
the present year. but the statement for
1855, when $54.509 was paid into the treas
nry, shows some interesting features con-
nected with the insurance business or the
State.
During that year 132 different companies
were doing business in Indiana. and OF
these nlnety-seven were fire and th1rty-nve
accident and life insurance companies. Out
or the ~ninety-seven fire companies eighty
paid tax To the State. or, in other words.
showed receipts in excess of their losses.
while seventeen sustained losses in excess
of their receipts. The South Meridian-
street fire, early in the year. contributed
largely TO the loss of the COM
pinne was a sSHci In TO SOME ofssst a GaS tie bnsi,
ness done in the State during the year.
Again. the summer of 1887 was an exception
ally dry one in all parts of Indiana and Tires
were generally attended with heavy loss.
The unusually large fire In this city and the
likewise unusual losses in other sections of
the State made business for many OF the
companies Improbable and lowered the tax
received by the State.
OF the thirty-tive life and accident com-
panies. all but three paid taxes, showing
that the profits in the latter class of insur-
ance are decidedly more than In tire insur-
ance. Of the total S54.509 paid in taxes in
ISIS. the eighty fire companies paid but SO
Si. or about $50 each. while the thirty-twO
accident and life companies paid $685. 45. or
something over 81 900 each. When it is re-
membered that this tax is collected on the
receipts less the losses. 1T can be seen how
much more certain is the profit in the life
ohA ~ dbtO llC u
law under which this tax is collected does
not permit any deductions on account of
expenses incident to RAINING the business.
and no account is taken of these expenses
III thise estimate. 1t is not improbable that
the life and accident insurance are attended
by greater expense. and 1t is cOntended in
some quarters that such is the case. No
data is at hand. however. from which the
relative necessary xpenses can be deter
mined. n no estimates could he made
with any degree of success.
Though seventeen fire and three life and
accident companies show losses in of
their receipts, the average for all the cOm-
panies indicates a handsome profit for the
business. The average receipts of the nine
ty-seven fire companies in 1883 were S24.01,
the average losses $40. go and the average
profits 81, S51. The average receipts of the
t~hirty-fve life and accident companies
were S53.535, the average losses 500. 153, and
the average profit S31,3S2. Comparing the
figures represented by the two classes of
business, il Will be seen hat the average
receipts of each life or accident company are
more than double those of the fire companies,
its average losses but little in excess and
its average profit nearly seven times as
great. The figures also demonstrate that
the risks of the fire companies are much
greater than those of the accident and life
companies, for seventeen out of the ninety
seven of the former lost money in 1883.
while but three of the life and accident
companies out of a total of thirtv-five
show losses greater than their receipts for
the same period.