The morning call., 1893-02-14
INSURANCE.

ms - RAT IKE
sistence. I'm which respect It is probably univ
aled our members have taken their policies ior
protection and not for speculation; that p'o'eo-
ton Is made as secure as human care 'i"" -"
dustry can make 1t; it Is treated III apsoiu''
equity; it is given at less average cost ina" III
any ofher company Our loss OF business Dy
lapse and surrender is therefore extremely s'""ii'
The amount at risk January /, 1898 was
s1577 .3o2, a gain from the previous year VI
$1,000, PAT.
EXPENSE ACCOUNT.
The usual careful regard for strict economy
has been had during the past year, ana tue Idsto
OF expense OF management to income was ohy
1912 per cent, ratio materially less imam th"b
OF any olher company.
This is the most comfortable Item IN the COST
OF insurance 1t Is the which Is generally
The most ignored.
In every other known branch OF business COM
petition has always tended 10 lower cost oil pro-
ductIon by more and more economical processes
and methods. In life insurance the reverse has
been true For The last twenty years cOmpetl-
ton has been directed, not TO giving cheaper
and safer insurance and securing greater equity
among members, but solely TO writing the
largest possible amount OF new business at the
highest rates OF premium possible, ana 10 the
most rapid accumulation Of assets ana the as
play Of the greatest financial exhibits. his mas
REQUIRED an enormous increase in the expense
account In this race many have doubled their
ratio OF expenses to Income; all OF the racers
have increased IL very largely; thaI Oh many
companies is fro NJ two 10 three times Inc Tatlo
OF this company. And they try to conceal us
effect on the cost OF insurance by schemes Oh
business which postpone all diViden as IOr long
period OF years, IN the hope that so many VIII
incur forfeitures during that period that their
losses Will make attractive dividends at Inc end
for those live and pay through.
But the competition grows always mercer, ana
the expense ratio grows always larger ana
swallows more and more OF the income and
leaves less and less to be forfeited, aud their
dividends OF fOrfeitures are steadily shrinking
and new plans are constantly devised to furnish
some new veil for the facts. and 10 attract still
more new business to furnish new forfeitures.
Against such competition 1t Is impossible for
US 10 accomplish those greater economies which
would be possible under normal and Iegiti-
mate competition. And glad that by
sheer resistance and the greatest diligence and
care we can hold steadily to our usual standard.
and not only prevent an increase In the cost OF
our members insurance, but even somewhat
further reduce II. Their interests have not been
sacrificed for the sake OF greater display.
And We desire again 10 say to our members
that We are able 10 accomplish what we have
for them, and at the same time make fair
growth, because we are able TO secure, II a COM
paraIively small, at least a faithful body or
agents; men who realize what life insurance at
its best is ana ought 10 be. and who prefer to
help WORK out that ideal at far less remuneration
than they could easily obtain for presenting the
speculative schemes that now secure the great
bulk OF The business. They making daily
pecuniary sacrifice TO conviction.
LIMITING BUSINESS.
The rapid growth OF certain companies to
enormous proportions, with the attendant great
and growing increase of cost. and the difficulties
and possible danger OF public nature Deeessar-
lily incident TO such great Accommodations OF
money. have attracted attention on the part OF
State officials everywhere, and a committee OF
State Insurance supeTinl eDdents is now consider
ing the pracicability of deVising some legislation
10 put ehecS or a limit TO a course Of business
which managers hUd themselves unable or I'M
willing to apply, because they can even ap-
proxlmateIy accomplish their expected results
only by an always increasing amount OF new
business 10 furnish new forfeitures. The spec
ulaiive results they seek bind them TO the only
methods by which they can be even partially
gained.
CoNDITIoN OF THE COMPANY.
The assets January l. 1893 are O,761,-
Sac 80. a gain over the previous year of
Sl,023,069 "a They are undoubtedly worth
more than they stand for
The surplus is S6.426,929 80, gain OF $685.
774 OF over the previous year.
But by 20 means is all Of the cOmDany's su-
perior strength revealed by these figures, salts
factory as they are In aseertainlng its lsbill-
ties for the future. il has charged Itself with
$500 900 more of reserve than Is carried on the
same business by any other company. On the
same basis OF reserve as is used by other COM
panies It's surplus is over $4,000
Our premiums and reserves must be cacu-
lated Oh the assumption that they will earn some
definite rate Of interest during the whole term
of our contracts. Originally, we assumed that
rate 10 be 4 per cent. These contracts are liable
10 run. many OF them, from nifty to seventy
years. In 1882, in view OF the progressive
decline in the rate OF interest IN perfectly safe
investments, and OF the wonderfully progressive
increase In capital seeking investment We did
not regard IL prudent longer TO assume to surely
earn per cent for so long period, and changed
the assumed rae to per cent for all business
written since that time. Thus as our old per
cent business passes oil and the new per cent
business takes its place. we are gaining each year
| a strength with which TO meet the future that
The figures Of our financial statements cannot
| disclose, and which no other company possesses,
or has as yet set SET out TO acquire.
Were it necessary Gas 1t is noO for Us 10 change
| our whole 1 per cent business TO a per cent
basis, could do so and sin have surplus OF
about So 300, 600, and without interfering with
| our dividend-paying ability.
Should the Postponed Dividend" or TOntins
| Companies do the like, as II has been animated
| they might 90, u WOOlu wipe OUT the OSlpO06u
| Dividends altogether. and very few OF them have
| surplus enough to make the change even on
| those terms.
SUMMARY.
In the forty-seyen years OF its existence the
Connecticut Mutual has
Received for
premiums. S173.3s5 .966 65
Received for
interest and
rents - 7o9O7, $50 %
Received for
balance pro-
nt and loss E. 1.143o73 81
Total receipts. 800 ..-..-... S245. 436, 100 25
II has
Paid out for
death losses
and endOw.
ments 49,. ss5,54S, s73 ST
Paid out for
dividends. so, 1927, $40 20
Paid out for