The herald., 1898-12-28
THE INVESTOR
oonduetsd By A. DoD1NsoN

IN this city with unusual interest this year,
says the New York Evening Post. Every
one is anxious to see the effect lin dollars
and cents) of eight months rate war in
hitherto profitable territory, and to dis
cover how eaah company has Jared at the
west, in cne south, and wherever rate cut
ting mas been prevalent. Although the
'~hole story may not be learned for years
to come, until term contracts have expired
and the average Of losses has been reached,
the forthcoming statements will at least
suggest, it is thought, to what limits in fu-
ture companies may reasonably go in PRO
tecting their business" or meeting compe-
ties (held by the companies) have advanced
in value, and that losses, although greater
than year ago. are as light as they are;
these circumstances will undoubtedly help
out the showing and leave intact, perhaps,
the accumulations of more prosperous years.
1t is estimated that the companies have
lost about $l2,00O000 in premium income
during the year This represents great
shrimkage compared with the profits of
year ago, when the losses were small and
the companies cleared from 10 to SO per cent
on their capital invested. A few of the COM
panies may show it is thought, about the
same volume of premiums as last year, al
| though the liabilities assumed have been
greatly in excess of those reported be-
fore the business became demoralized
Then, too, what are called 1.-The principles of
sound underwriting" have been lost sight
of at coIters where competition has been
keenest, and safeguards of all sorts have
been disregarded in the effort to get 'ahead
of the other fellow" 1t has been on the
whole suggestive experience, not without
its lessons both for the companies and for
the assured Policy holders sean their poll
cies now more closely than formerly. They
seek only the best indemnity and the con-
tract modified by fewest conditions. The
companies, too, have reached the level of
supply and demand and no longer quote
rates with the assurance that lowing to tar
| iff agreements) no other reputable company
will underbid them. Things have changed
manterially within the last year. and the
assured is now practically in control of the
| situation.
| The present indications are that very lit
tie, If any underwriting profit will be made
by the fire companies for the year now clos
ing, On the other hand, all classes of. Sc
cnrItles have very largely advanced in value,
and the nominal profit resulting from this
advance in prices will probably offset any
loss which may be sustained on the under
writing transactions of the companies, so
that their surplus will remain substantially
as at the close of last year. We know that
| there has been very considerable average
reduction in rates all over the country dur
'HS tliS PteSSHU year, WHICH VIII amount
probably to something like 10 per cent, and
this would mean a loss of income to those
companies reporting to the insurance de-
partment of this state of from 10000, 900
to Sl5,000,000
We also have reason to know that the ag-
gregate losses all over the country are sew
eral millions in excess Of what they were
in 1897. If these estimates should be found
correct it is hardly possible that any under
writing profit will be made. In the city
of New York. since the recent conhaqration,
rates have materially stiffened, and rsur-
ance cannot be obtained today at anything
like the rates which were current before
this heavy loss occurred. That this heavy
loss will help to bring about restoration of
reasonable rates in due time there can be
little doubt, but there are so many questions
of difference between the companies as to
what rules should govern a tariff association
that it must take several weeks perhaps
months, before any general agreement can
be reached, and even if a tariff should be
rec established, the rates, in my opinion,
would not be very much higher than they
are now,