The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1897-03-01
5 BAILLARGEON'S'
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date sltoSs,so7 by an entirely oonssrva-
tive valuation.
Profit and Loss
A small net loss of SIS, 81 on some OF
the real estate sales and sundry items
was offset by a net gain OF <6S, 246,62.
mainly on transactions in bonds. leaving
So.iioD 10 the good.
Mortality.
We paid TO the families and estates OF
deceased members during the year A.iO6.-
$685.. The value and tineliness of this
great sum 10 its many recipients in their
hour of need are the measure OF our
yearly service to the households Of our
country. Its hslpfulness can be some
what realized II one viii but imagine that
amount being constantly distributed
among cases ike some that will occur 10
any OF Us. and viii think what IL has
meant TO them, or would have meant TO
those. who did net have IL. IL is an un-
mixed good, coming when the necessity
for such help is greatest.
Our death losses were so far inside
those expected and provided for that the
savings therefrom vera S436.es9.
Il should be always borne in mind that
IL Is not the amount of q company's
death losses, nor their proportion TO its
amount at risk, nor TO its income or its
assets. which are significant OF their ef-
feet upon its prosperity, present or future.
The older its business the longer Il has
been IN force: the greater the average
age of its members the greater will be
the proportion OF deaths and the volume
OF losses. The question Is not only what
losses have occurred but what were ex-
pected? What losses were anticipated
when the premiums and reserves to meet
them were comnuted? Are the actual
losses inside or outside that expecta~
ton? That is the only pertinent ques-
ton in the matter.
Expeuses.
The ratio OF expenses 10 income in 1896
was 1855 per cent: an increase over the
usual average OF about one-half OF per
cent. This was due TO no increase in
the cost OF getting business or In any
general expense. but solely 20 the in-
creased cost OF repairs 10 real estate
taken under foreclosure, and necessary 10
put II IN proper order. and TO rightly pro-
systematic economy which always dis
tinguishes this company has been rigidly
maintained
New Business.
In consequence OF the unbroken busi-
ness depression OF 1856, and especially
during the months OF the political cam
paign, and because we spent no money
( trying 10 overcome these obstacles. we
wrote about 10 per cent. less new business
in 1896 than in 1885. The renewals OF old
business were so wei kept up. however.
that we lost during the year on the whole
amount in force only ssis.sso.
We believe the persistency OF the Old
business OF the Connecticut Mutual Is
quite unique. II Is an element or great
strength and OF cheapness as well. IL
costs far less TO take such care of Old
business as to keep IL, than TO get new 20
replace IT.. And we are fortunately not
TN the position OF those companies whose
heavy expenses can he met and whose
extravaganza representations or post
i poned or accumulated dividends" TO he
paid fifteen or twenty years hence. can he
fulfilled only by the proceeds OF heavy
forfeitures OF old business every year.
Dividends.
The dividends paid on each policy In 1896
was larger than the corresponding one
for 1895. There VIII be a similar increase
In dividends and consequent decrease in
the cost OF insurance Oh policies renewed
| IN 1891.
Surplus.
We call attention 10 those items from
which IL is possible TO derive a surplus.
/ and 10 the manner in which they have
/ been applied during the year. with a pre-
/ nTninary word of explanation.
We agree to pay certain sums on the
J occurrence OF a certain event. To do
! this we must have premiums large
| enough 70 pay running expenses, the cur
rent dea n claims and provide a reserve
for the greater mortality that Viii come
| with the increasing age OF the business
| we can earn interest on that reserve
while we hold H.. 30 we assume a.
maximum death rate, maximum eX-
| pense rate and minimum rate of inter-
| est. and calculate our premiums and the
/ reserve 10 be laid aside out Of them on
those three assumptions. II the death
losses and expenses are less than We as
| sGmed. we save the differences from the
| premium II the interest Is more, we save
/ that also There are sundry other In
/ cldental items. Here is an exhibit OF
| the opera ton of these several factors in
/ the Connecticut Mutual in 1856;
! Part OF premium provided
| for expenses &c. ...-...... 1857 ,ZS
| Interest and rents in excess
| OF rate assumed ..........1, os0. III
| Balance. profit and loss 5o,lA
/ Saved from expected death
/ Saved from reserve on sur
/ rendered policies -.+-..... l19159
| Sundries .....-.-........ Obj
| This total Of items applicable 10 ex-
| penses. dividends, &c. has been applied
| as follows:
Expenses Of management. ssssIls
Taxes =. 1870. -; -; 1854
OF bonds and stocks 1855
81. II. 7ss
! Dividends paid ...-..-.-..u .274 SO
/ Additions 70 accumulated
/ Ineraa-s IN surDius ........ 57.04I
| 15-t 2n
H.ssoo ol
ire only item iu This exhibit which
| does not explain Itself Is probably the
| saving from ths reserve on policies sur
| rendered or not renswed-siZs. T5a This
grows out OF iapsed and surrendered poll
cies Cess those geirstatso) for s. 80 10,
ans reserve upon which was &c. So, OF
which amount Ss7f SIS. or bout 81 per
1 80 70 hFlH