Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-07-26
AGENTS TOO PLENTY
For the Fire Insurance Companies to
Make Many Millions.
UNSAFE CONCERNS WEEDED OUT.
Three Big Confagrations Have Played Havoc
With Profits.
DISTRIBUTION OF RISKS NECESSARY

The trouble local insurance companies
nave been put to lately to serve the public
gratis is attracting considerable attention in
business circles, and prompts outsiders to
ask whether people are growing more dis
honest, either building too cheaply or burn
Ing property in order to realize on the in
surance, or whether there is something radi-
cally wrong in the methods pursued by the
companies. Some people think that, like
sewing machine and book-publishing COM
panles, insurance companies are employing
too many agents, and dividing pre-
mlums to too great an extent. 1t is
feared by people that some agents in
order to get business are apt to take risks
rather loosely. While Pittsburg and ALLIE
gheny companies are honestly paying their
losses and some of them making little
money the fact that seven of them were
forced to pass their dividends makes some
people shake their heads.
irresponsible insurance companies are
pretty well wiped out in this section at
present, though Fayette county merchant
tells tale of woe that it is thought ought
to set the Insurance Commissioner on an
investigation. 1t was thought by some
people that the wildcat feature of the bust
ness is quite prevalent hereabouts, but Mr..
Hays, of Hays & Lowry, states that ire
sponsible concerns that in past have done up
people are pretty generally known now and
only people who are verdant enough to
take the bait of a cut rate get caught.
A Few Frauds Yet Remain.
Some West Virginia companies, without
assets worth speaking of, did some business
hereabouts for time. Their plan was to
pay small losses, thereby advertising them
selves, but when they got caught for large
amount there was pretty sure to be Gle
down" unless they could escape on tech
nicality.
The omnibus style of insuring does not
always pay companies with small capital
In an exceptionally fortunate year they may
make money, but they are apt to lose an
entire years profits by the burning of
large warehouse, mercantile establishment
or Touring mill.
that too much is paid to agents. but he SAYS
it cannot be avoided so long as foreign COM
panies compete so sharply. Formerly 10
per cent was considered fair remuneration
for an agent, but now 10 ner cent is paid
without question and some want 20per cent,
and even as high as 25 per cent has been de-
manded, but this is not 60, strictly speak
ing. Mr.. Kohne takes the situation philo- |
sophically. He says the lean must at times
be taken, as fat cannot be had all the time. |
The last year has been an exceptionally bad |
one in Pittsburg, the Liberty avenue,
Seventh street and Wood street fires alone |
cutting into insurance companies profits, |
but foreigners got their share as well as |
Pittsburg companies.
All Suffer Proportionately.
The fact is that risks are now so divided |
that all companies suffer proportionately. |
For instance, when a local company takes |
s., 900 risk it at once proceeds to reinsure |
half in some other company. 1t seems that |
insurance men get black eyes at tolerabIy |
regular periods, no matter how carefully |
they may discriminate, and their only chance |
is in wide distribution of risks. :.
AT the same time it is notorious that there |
is much criminality in the construction of |
buildings. Competition is so sharp that
unless responsible architect be engaged to
supervise there will be great risks taken in
The construction of f1ues, and this matter is
not likely to be remedied so long as wood
is cheaper than iron and brick. If con-
tractors and sub-contractors were held
responsible an improvement
night be effected.