Omaha daily bee., 1897-08-22
REprclNG iNSrRlNCE RArES.

rates Is not confined to Omaha. In
nearly all the large cities of the country
the underwriters are being called
upon to explain why decreased
fire risks and diminuton of losses
by fire do not justify de-
mand for reduced insurance rates.
The use of fireproof materials in the
construction of buildings, the improve
ment in their lighting and heating, the
better policing of cities and advances
made in the efficiency of our tire-fghtinS
forces. have rcvolutionized fire inSur-
ance. Such conhagrations rs the great
Chicago fire have become physical I'M
possibility and incendiarsm minimiZed.
These facts constitute cogent reasons for
very material reductions in fire policy
premiums.
The New York fire commission recently
made a formal demand upon the fire un-
derwritcrs for a reduction of rates in
that city on the ground of lessened risks
and improved fire protection. To this de-
mand the insurance rate makers made
the following response:
There is no question that a permanent re-
duction in the rate of fire loss to insurable
property must eventually be followed by
reduction in the insurance rates. This is a
law which we cannot resist. The disposi-
tion of experienced underwriters is, however
decidedly in favor of such adjustment of the
rate to the loss rate as a matter Of good
business policy.
Furthermore this is recognized as a legiti-
mate and commendable demand on the part
of those whose good administration may
have contributed to permanent and sub
stantial reduction in the rate OF fire loss
that such successful effort should be re-
warded and encouraged by a readjustment
of insurance rates. The excellent work done
by your commission-whose results you
fortfy by figures and statistics-appears to
be entitled to such recognition.
But, a matter of fact, the fire under
writer's have foresthlled your request They,
of course, watch very closely the statistics
of the subject. and, being in daily touch
with them, they began almost Immediately
after the time when, your figures show,
the Improvement began, to respond by re-
duction in rates. Such reduction has gone
steadily on for over two years past, and to-
day the average rates are from 10 to Is per
cent lower than two years ago. The reduc-
tion is still going on; and on an increasing
scale.
If the improvement in the rate of fire loss
continues, it is more than probable that an
other twelve months will witness further
reduction equal to that of the last year. The
method of such reduction may not be of the
exact character that you would prescribe. 1t
has not so far, taken the form of fiat and
sudden scaling of rates by percentage re-
duction. There are reasons which an under
writer could explain which have made the
process of reduction by classes more proper.
This is very ingenious plea to bolster
up the pernicions system of discrimina-
tive rate making that has been intro
duced throughout the country. Instead
of giving insurers as a whole the benefit
of decreased risks and losses. the insur-
ance magnateS single out favored policy
uncomplaining or uninitiated property
owner paying rates established when
losses were high. What insurers have a
right to demand and are entitled to is
fair rates for all and favors for none.
A policy that tolerates discrimination is
based on injustice and begets corruption.
1t places it within the reach of dishonest
rate makers to fix two premiums. one
for the company and the other TO. him
self, the latter payable in money or in
personal concessions from the insured
that are equal to money