The San Francisco call., 1897-02-27
LIFE INSURANCE.
FlETY-FlRST ANNUAL REPORT
OF THE
CONNECTICUT MUTUAL LIFE
INSURANCE COMPANY.
LIFE INSURANCE.

IltNUloHHOE UVMl dN1s
To the Mem bers:
The year 1896 was marked by almost unre-
mitting commercial depression affecting every
interest ana by serious disturbances in the
public finances producing apprehensions more
or less approaching panic for nearly the entire
period, both conditions having their origin
largely in those questions which became the
issues in political campaign which, for the
critical gravity of the results involved and the
intensity of feeling engendered, has had no
parallel in our history.
In such year enterprise loses much OF its
usual reward and the best results in nearly
any business are those accomplished at least
cost while maintaining the efficiency OF the
working machinery and awaiting such faVor-
amount OF business to be done at usual eos
and without strain.
Effect on Business.
Especially is this true in the business of life
insurance. Its cost is usually reckoned as a
part of ones expenses; and when money Is
hard 10 come at and profits are little, and per-
haps nothing, new expenses are not readily
undertaken, the usual ones are often curtalled
and business shrinks. Under such conditions
large volume OF new business can be main"
tanned in only one way; by such concessions
on the first premium as tempt new insurer
10 take policy which costs him little or moth
pense of the older policy-holders whose money
has to make up the deficiency caused by what
the "new blood" costs but fails 10 pay.
Were any given quantity of new business In
any one year necessary to the stability of
company-as it might be were the company
new and its amount at r1sK as yet TOO small Tor
q safe average experience-there might be
reason for keeping up pace even at Increased
cost, If the business so got were likely to stay
by. But there is no company OF our class doing
business to-day in any such situation; nor any
w hinh q IN q
with the conditions affecting the volume OF
every other business, except those which have
attached TO the simple methods OF legitimate
life insurance certain wholly extraneous fea-
lures which create necessities OF ther own
and dominate the situation. The "accumu-
lated dividend companies, some OF which are
losing $125, 900 900 and upward or old Dusl-
ness every year, and must keep very great
amount OF business going in order 10 keep up
the lapses ana forfeitures necessary to pro
vide their accumulated surplus" or tontlne
fund, have tried to educate the public 10 be-
lieve that great new business" and great
amount of risk" were the true measures OF
success, and may feel that their choice lies
between keeping up the inflow at a1y cost, by
any effective means, and such shrinkage as
they cannot contemplate with equaninity.
However that may be, the vicious and costly
methods OF competition are continued.
An Ideal Position.
The Connecticut Mutual is happily under
the stress OF no circumstances, natural or ar
tificial, requiring it to force Its business De-
yond the conditions OF the times. Its position
Is ideal, and that to which every company
ought 10 strive to obtain, business so large
as TO give absolute stability in its average ex-
perienee, yet not so large bue that in good
times aud under fair conditions 1t can be
main tanned without difficulty, even allowing
for occasional and considerable Shrlnkages in
bad times, standard of solvency beyond
question, investments worthy such trust,
and an expense account so small as TO give the
largest possible saving to policy-holders and
50 adjusted that whether It's business in
creases OF shrinks, 1t will not have 10 cut Its
dividends on that account.
That is the position we occupy. So far as
the absolute safety of every present policy
holder is concerned, or so lar as his future
sary that we should ever write another new
policy. The company would pay out 10 the
very last man and maintain the same relative
high dividends without IL. The only reason
for taking new business is that We may give TO
new families the same secure and cheap pro-
lection that those OF our present members are
getting. The latter nave no need whatever
for any new business And, therefore, it is
that, among all the struggles for first place as
to new business and amount at risk among the
large companies and those of the smaller ones
to Keep somewhere in the race, the Connect
cut Mutual las steadily refused to compete for
new business at the cost OF present policy
holders. What we can get without reducing
their dividends we take; what we can't
goes to those whose inducements to agents
and whose speculative proposals and mo-
mentary emptations to new men are great,
but whose dividends 10 old members are
smaller. In good times we more or less en-
large our business. In hard times we husband
our strength, indifferent TO all considera tions
except maintaining our standard of excel
lence.
We are thus explicit, not only because the
matter is apt to these times, but also because
in the ompetition of business il Is commonly
represented by those whose only point OF com
parison with US is in respect OF new business
and amount at risk that 1t is undesirable to
insure in company which is not rapidly in
creasing itsbusiness; that expenses would be
less, dividends larger and security greater II
we were pushing harder for new business and
getting more of it-a statement which is false
in every aspect and particular. There must
come point with every company, no matter
how rapid its present growth beyond which 1T
cannot force an increase OF size. And several
CT the largest companies are rapidly approach
ing that point. What will be their status
then? Should the public, therefore. turn from
them? If they will be then undesirable COM
panies, why should they be bu!lt up at all
II a company be truly desirable, prosperous
and safe only while and only as it is increas-
ing its risks, then the more RAPIDLY company
is growing to-day the faster it is approaching
the time when ii will be no longer desirable.
prosperous or safe. II that be so, life insur-
ance should be summarily suppressed as an
inevitable swindle.
But, as our expense rate is less than that of
any other company, and only about half that
of the great pusners, while our results to
policy holders are very much larger than
theirs, and our stability greater and more
conseryatively based, the advantage to be de-
rived from following IHSlT WOulQ
seem more than doubtful, especially in view
OF the heavy and continuous reductions they
have made and are still making in their divi-
dends, while we have maintained our scale.
The reproach ofsuch conservatism we are very
content to bear. The yigor of the oak is of an
enduring sort.
Review of the Year.
Notwithstanding the dullness of the year
1896, the affairs OF the company in every essen
tial particular were as prosperous as could be
reasonably expected under the conditions. A
gain in income, assets and surplus, while earn
ing an increased diyidend-an increase OF
strength more than corresponding with the
increase in liabilities, while decreasing the
cost OF insurance-may, IN such times, well be
regarded as fairly satisfactory.
The perations OF the year, as covered by our
report to the Insurance Department., are as
follows:
Net assets, January /, 1896. $50. 7e4O2o 81
Received
For premiums. $4,743,236 rs
For int. and rents. S,l39,405 %
Bal. profit ald loss. 80, 14U rs
Total income .................... 7,932.7s 72
$6s 1886, SOB Sc