The times. [volume] (Richmond, Va.) 1890-1903, 1894-10-02
The Lloyds System Of Insurance Sue
CeSSlully Extended to
Fire Risks.
INDIVIDUALS Is UNDERWRITERS.
Eight Hundred Prominent business
Men Now Competing With
Corporations.

re,ieafedIv made the subject OF attack
| by the 'old line" companies. whose al
| legged expensive management ana auto
cratic rule have been threatened by the
As nearly everybody knows. the
Iaoyds system OF insurance OHslha'ea!
In England, but few are aware that II
was begun az far back as losS. Ahotnei
surprising fact Ia that ny 10 the present
time no LloyGs insurance association,
either In England or this country mas
failed. AS a matter OF i8cI CON- COM
| pany OF this KIND cannot fail, because
every dollar OF the assets or the mem
Ders is available 10 pay loss ana not
| merely the premium alone.
Fire insurance men agree that IN
| suTdnce is needed by the merchants ana
manufacturers or New York, and the
| United States for that matter, far be
| yond the accommodation that can Oe
Hence II has been said that II the cap
! ital which has been driven out OF Inc
| business by severe competition among
the Old line companies VIII not return
| Tor the accommodation OF the pubic,
then either the LlOyds or the mutual
system Will be required.
From the litue seed dropped BY I'd
ward Lloyd in London IN l6o, has grown
| gigantic LlOyds, whose financial re
| spOsibility Is never questioned through
| out the Whole world, and whose annual
| premium income Is upward OF $GOOO,pJc
| In transplanting the system to the
alterations. Under the mOdcrnlZei
| plan those who wish 10 enter upon IN
| diUdual underwriting do SO by appoint
| ing an attorney or attorneys to act ana
| sign for them, thus relieving them Of
| the incidental WORK and placing their
| interests In the hands Of those more
experienced In the business.
a "Jloyds' Is not corpration nor
copartnership. nor is one individual
member Of the LlOyds responsible with
or 10 any Of The others, but simply
and solely himself agrees TO indemnify
the loser by ire for certain named
proportion Of his loss. II the LlOyds
Is composed Of twenty members the
only association between them IS that
each gives full power OF attorney
empowering one person or firm TO do
tie business for them, and also APP
points d committee from their number
to safely care for the money received
their attorney.
II their attorney issues "A policy for
S3'W0 each member OF the LlOyds IS re-
sspohslble for $50 only, the same as If
the attorney had written and delivered
twenty different policies for $50 each.
Inc question may be asked suppose
one or more of the subscribers fails Or
Is unable TO pay his share Of the loss.
answered by asking Suppose an in
suier insures in twenty stock COM
pdnies ana one falls. vino paws for that
bankrupt company
The cases are exactly similar. 1t Is a
question Of credit. but with the adj
vantage on the side Of the Lloyds I'm
ms way II one ~ the members fails
hls attorney INN "dlatcly ceases 10 issue
pohcleS IN MS name and may procure
another subscriber. who, for the prlvi-
reyes or membcrship Ia d profitable
business, Will assume all OF The liabilities
past, present and future Of the failed
member, ana take all of his rights TO
prohts In the business.
Another ready question is, How can
L "a f..I 4.
less expense than a stock cOmpanv2' IL
KNOWS exactly what It's expenses are 10
De. II has no office rent L. bav. nor
docs 1t pay any salaries All such cN-
penSea are paid by its attorney out Of
stipulated percentage ON the pre-
NUNS received. II the business Is large
or sHul IL Only pays the same proper
ton. The reason for the failure Of MANY
STOCK companies may he found I'm the
Id't mat thclr cN0rbltdut expenses have
SdieH thcm up, requiring a larger amount
vi premiums 10 pay expenses than they
were able 10 obtain.
The individual insurer. or LIoyds has
S'Hdll ONCE expenses. and by writing
surplus lines on large mercantile and
manufacturing establishments which thu
stock companies cannot fully cover thor.
DtluS TOO few companies 10 10 the
business whore large values are cOucen-
udted IN single buildings. or IN adjoining
ones, the Insurer seeks other protection
ana finds IL in individual or LIOvds iusur-
duct. These surplus lines are obtained
at less expense than ordinary Insurance
Another important point is the measure
OF protection given 10y a Loyds guar
aut-c as compared with a stock conluanv
Ia stock company The capital paid IN
is the only guarantee. There ls no luIi-
Vldual eSpOnsIhility. OF course no one
would invest IN insurance stock II eX-
periouce had not shown that I'M
premiums paid in would more than oqual
the losses and expenses ana give a
fair margin for profit. In LlOyds the
security consists in the strength and
credit of the insurer. together with the
the further sum he IL liable to be as
sessed for. This sum is usually about
5000 for each subscriber which means
500 900 Il there are twenty underwriters
on the policy. Now If each 5000 uolicy
makes q liability Of only $50 10 each
underwater. after all premium receIuts
are exhausted. IT can be seen that moth
ing but great cOuiaEration like th,.
Chicago fire can bankrupt I.loyds. ana
such a fire would be equally destr1Icfiv.
TO a stock company.
A table compiled from the sworn re-
ports made 10y the stock lire insuranr,
companies 10 the insurance departmrnts
of all the States in the Union shows tb,t
the average loss ratio TO prerniurD no
ceipts for ten years ending IN 1892 was
50 10 per cent, and the average exDans.
ratio TO premium receipts during Tho
same period $3.50 per cent This Leaves
a balance Of 2B per cent ana seems IN
show conclusively that the evil of fire
insurance underwriting by stock com
panies does not exist In Lhe loss ratio
but in the unnecessarily eXtravagant ex-
pense ratio.
During 1898 the public paid the old line
companies $lt5.0y000. The difference he
tween the stock companies IS. % per cent
expense account and the Lloyds o per
cent expense account (2j per cent being |
allowed the attorney or attorneys for ali |
expenses would show a balance in favor
of Lloyds of 81 $500
Many Of the largest corporations and |
ilrms In the United States are insured in |
one or the other Of the Lloyts. and 500 |
OF the most reputable, reliable and re- |
spOnsible business men of the country |
whose names may be obtained of any OF |
the Lloyds, have determined 10 demon |
strate that the Insurance business can h. |
conducted at reasonable expense and |
nave as individuals conferred their power |
10 attorneys 10 underwrite In their names |
at thirty Lloyds
Among the subscribing underwriters in |
me various Hoyds are: DreAel. Morgan |
y CO., Levi Il. Morton. Flint x Co.. |
Adrian lselin. Harry O. Havemeyer |
George Bliss, Robert Colgate. y. Apple |
ton d Co, Oliver Hartman Samuel Tn |
termeyer, Cornelius y. Hoagland, Oar
win r.. James. David :. Brown. Charles |
cock William Il. CoGswell. }. II. FlagIer. |
Robert IL. McCurdy. X. b. Rathbone, |
Felix Campbell. William II. Baker. Ru-
land & Whiting. Fred. Valentine. Il. W |
Locw, w. Mccarthy Little, John Nc
Anerny. Francis A. Palmer Milo NJ |
l}cldng, George L. Johnston. Willis u. |
Marvin. ex-Secretary Charles = Fair
hid, Edward J. Berwind. Addison Cam
mack. William r.. Grace. Isaac brandon.
Joshua Piza Russell Hoadley. Weld Es
ate, Richard V. Harnett, and Vernon II.
Brown.