The Union times. [volume] (Union, S.C.) 1894-1918, 1895-01-11

The question may be asked. "Sup-
pose one or more of the subscribers
fails or is unable to pay his share Of the
loss, who pays his $250?" which is
easily answered by asking "Suppose
an insurer insurcs in twenty stock COM
panies and one fails, who pays for that
bankrupt company
"Thc cases are exactly similar. 1t Is
a question of credit, but with the ad-
vantage on the side of the Lloyds in
this way: If one OF the members fails
his attorney Immediately ceases to
issue policies in his name and may pro-
cure another subscriber, who, for the
privileges of membership in q prof.
table business, will assume all of the
liabilities past, present and future of
the failed member, and take all of his
rights to profits in the business.
Another ready question is, " How can
the Lloyds do a profitable business ut a
less expense than a stock company ?"
1t knows exactly what its expenses are
to be. 1t has no Office rent to pay, nor
does it pay any salaries. All such ex-
penses are paid by its attorney out Of
II stipulated percentage on the pre-
miums received. If the business is
large or small it only pays the same
proportion. The reason for the failure
of many stock companies may be found
in the fact that their eXorbitant eXpen-
scs have eaten them up, requiring a
larger amount OF premiums to pay ex-
pcnses than they were able to obtain.
Another important point is the meas
uro of protection given by u Lloyds
guarantee as compared with IL stock
company. In u stock company the cap
ital paid in is the only guarantee.
There is no individual responsibility
Of course, no one would invest in in
surance stock if experience had not
shown that the premiums paid in would
moro than equal the losses and eXpen-
scs and give Il fair margin for profit.
In II Lloyds the security consists in
the strength and credit OF the insurer,
together with the amount of deposit
he has paid in and the further sum he
is liable to be assessed for. This sum
is usually about 5000 for each sub
scribcr which means 800, 600 if there
are twenty underwriters on the policy.
Now if each $1,000 policy makes a
liability of only $3.50 to each under
writer, after all premium receipts are
exhausted, it can be seen that nothing
but real conilagration like the
Chicago fire can bankrupt Lloyds,
and such fire would be equally de-
structive to a stock company.
n table compiled from the sworn re-
ports made by the stock fire insurance
companies to the insurance depart
mGntS of all tho States in the Union
shows that the average loss ratio to
premium receips for ten years ending
in 1892 was 59.l9 per cent, and the
average expenses ratio to premium
receipts during the same period 3S. .3:}
per cent. This leaving balance of
2.49 per cent, and seems to show con.
clusively shat the evil of fire insurance
underwriting by stock companies does
not exist in the loss ratio, but in the
unnecessary cXtravagant expense ratio.
During 1893 the public paid the old
line companies $l65, 100000. The diff
ference between the stock companies
3S.33 per cent. expense account and the
Lloyds % per cent. expense account
(25 per cent. being allowed the attor.
ncy or attorneys for all cxpcnscs)
would show balance in favor Of
Lloyds Of $2l ,945 900.
Many of the largest corporations
and firms i'm the United States are in
surcd in one or other OF the Lloyds,
and 800 OF the most reputable, rclia-
BILE, and responsible business men of the
country, whose names may be obtain
cd OF any OF the Lloyds, have deter
W uCIuOHSbTdIc IlluU Vic lIlSuF-
ancc business can be conducted at II
reasonable expense, and have as indi-
viduals conferred their power to at
torney to underwrite in their names at
thirty Lloyd.
Among the subscribers and under
writer's in the various Lloyds are :
DrcXel, Morgan u Co., Levi u. Nor
ton, Flint Il Co. Adrian Iselin, Harry
0. Havemyer, George Bliss, Robt. Col
gate, ID. Appleton Il Co., Oliver Harri-
man, Samuel Untermcyer, Cornelius
n. Hoagland, Darwin II. James, David
S. Brown, Chas. w. Drak, Alfred II.
Scott, Frank Hiscock, William B.
Cogswclls, j. II. Flagler, Robert II.
McCurdy, II. b. Rathbone, Felix
Campbell, William Fl. Baker, Rutland
Il Whiting, Fred. Valentine, f.. w.
Bliss, f. +. Gleason, Hon. Edward V.
V. Locw, w. Mccarthy Little, John
McAnerny, Francis a. Palmer, Milo
NJ. Bclding. George Il. johnson, Will
lis B. Marvin, cXSecrctary Charles s.
Fairchild, Edward }. Bcrwin, Addison
Cammack, William Il. Grace, Isaac
Brandon, Joshua Piza, Russell H0ad-
ley, Weld Estate, Richard V. Har-
nett, and Vernon II, Brown.
The United States Constitution,
which ovcrrulcs all State laws, guar
antecs the individual insurer in his
right to do SO business in any State in
the Union. Lloyds are not under the
ON nE bot Il