The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1895-08-19
Fire Insurance by the State.


A paper recently read by Charles Ac-
ton Ives before the Business Mems as
ISOLATION of Newport. r. l., advances
several novel ideas. In 1893 in Rhode
Island the total amount Of written fire
risks was $477,650.6 6S3; the total OF
premiums received was $4,272,H9; and
Of losses paid, sl,769,7S2. This shows,
during a year of business depression. a
difference between losses paid and
premiums received amounting to $2,5O2,-
267: and Mr.. Ives makes the point that
this difference, or profit, was more than
twice the total expenditures of the
state government of Rhode Island for
the same year. which were $l,243.57S;
thus proving that fire insurance must
be profitable to somebody.
That somebody he proceeds to locate
by reproducing from the Rhode Island
Fire Insurance Commissioners report
for 1894 a table stating the general
business of 81 companies for 1893. The
table has six columns; one showing the
tai of the company; q third, the amount
received for premiums; q fourth, the
amount paid for losses; a fifth, cash
dividends to stockholders and policy
holders; and a sixth, brokerage, fees,
salaries, office charges and other run
ming expenses. Fifty-eight companies
report complete details of their busi-
ness. These companies, upon an aggre-
gate capital of s3S, ,SlO.075, received for
premiums s7O.1S9,3S11O, paid for losses
$47, ,261, ,959.5S and of the s22,927 ,371.52 of
gross profit thus derived returned i'll
dividends to policy holders and stock
holders only Si,4O9. 1920, while $24,S35,-
2l9.l3, or nearly 100000 more than the
years gross profit, was expended In
brokerage, fees. salaries, office charges
and other running expenses. In other
words, the man who now profits by fire
insurance is the agent or middleman.
The foregoing companies, 1t needs to
be borne in mind, were stock COM
panies. The total amount of risks
doing business on the mutual plan. in
1893, was $3.50, 1854, 40; the total of premi-
ums paid was $S,35S,207; the total Of
losses paid was S1,Ol9, 1873; the total Of
brokerage, fees. salaries, office charges
and other running expenses was only
S507, $50. IS, and the total amount of cash
premiums returned during the year as
profits or surplus on terminated poll
ces was s2,577,7O5.17. Mr.. Ives, by off,
cial tables, also shows that after the
payment of all losses and cash divi-
dends the stock companies hold In in
vested funds, not including cash pre-
| sently available, over and above the
total amount of their capital stock, the
sum Of $122, ,919, ,99S.S1, which represents
part of the large sum that has been
| taken from the channels Of individual
saving and wealth and comfort for the
benefit Of those who do our Insurance
business for us, after paying expenses
and dividends"
Inasmuch as the foregoing statistics
CoICluSlNCly SuoW III 81, tIic
of the mutual over the stock plan of in
surance; and secondly, that fire insur-
ance is a highly profitable business,
MIR. Ives wonders why the state should
not save this profit for its own pur-
poses by assuming charge of the busi-
ness Of Insurance, running 1t cheaply
on the mutual plan, and applying the
profits to current governmental ex-
penses. Says he, in conclusion: '"The
fact that the people of the smallest
state in the union annually pay for in
surance, in excess of the amount of
their losses, more than twice the cost
of their state government is worthy of
grave consideration. 1t is clear that
| under the plan of state insurance sug-
gested there would be saving of about
80 per cent. in the rates of insurance,
and there would be no question, more
| over, about the solvency Of the in
surer."