Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-07-13
REGARDED AS A FAILURE
EFFORT TO INSURE HARMONY IN IN
sURANCE CIRCLES.
COntending interests Still Mt Variance
and Rate War Threatened
Counter Statements.


OF fire insurance underwriters. which came
here Tuesday for the purpose of settling
the difficulties that beset the local situation.
completed, they understood it, their mis-
sion when they submitted yesterday after
noon. their conclusions in a report to the
Association of Fire Insurance Underwriters
of the District. AS stated in yesterdays
Star, the report recommended a reduction
to fifteen and twenty-five cents respec-
lively. in the rates on brick houses and on
furniture, an advance of - per cent on
mercantile rates and the territory of each
company to three agents. There was also
recommendation in favor of the appoint
ment of manager for the association.
While this report was adopted, the vote
showed that the members of the association
were by no means unanimous in approving
the changes proposed. In addition. it was
evident today, from what insurance men
said, that so far from healing the differ
ences. the committee has only aggravated
the soreness. In fact. there those who
are of the opinion that not only was the
visit OF the middle department committee
to this city a failure, but it has widened the
breach which threatens the harmony in
local insurance circles.
The action of the committee, it is assert
ed, is not only in opposition to the judg-
ment of the local companies, but it will
not accomplish object which is to
bring back into the association those that
were recently suspended.
Matter of Doubt.
1t is doubtful whether these companies
will return to membership in the associa-
ton, because. for one reason, the report
recommended the limiting Of agents for
each company to three. Further, it is stated
the committee went directly counter to
what are considered the vital interests OF
the local commands by reducing the
on preferred business. This class of bust
ness is almost exclusively carried by the
local companies. while what are known as
the agency companies carry mainly the
mercantile risks The committee advanced
the latter rates while reducing the former
and as the agency companies greatly out
number the local companies in the repre-
sentatives in the association. the action
taken is looked upon as the exhibition of
the exercise of power to crush the local
companies.
result in part of the present situation at
least in the opinion of unprecedented OBJ
servers. A war of rates is imminent. The
advanced price on insurance on business
places can be put at once into effect. If
policy on the store of q merchant happens
to expire at this time the agent can tell
him that the rate has been increased -
per cent, so that if he is now paying 90
cents on each s1n0 he will hereafter have to
pay sl12la. In the event the merchant re-
fuses to meet this increase it is said that
uIidbuDLeulS lHe TlSk Will be taken Dy the
local companies at the old rate.
On the other hand the local companies
Will have to meet after September - the
proposed cut on preferred business, and in
this way it is thought the rate war will be
inaugurated. 1t is acknowledged that in a
struggle of this sort some of the local COM
panleS are likely to go to the wall but it is
said 1t is better to meet death in that way
than by the slow process of starvation
which the report of the committee would
make inevitable.
The Proper Course Indicated.
1t is claimed by those who are not rad
ical on this question and look at it neither
from the standpoint of an agency company
nor a local company that the proper course
to have pursued to preserve harmony was
to have attempted to secure united action
in the matter of limiting the number Of
agents. 1t is asserted that the rates should
not have been touched at this time. AS it
is, the agency companies, it is asserted
have got what they wanted and what the
local companies opposed-an Increase in the
mercantile rates as well as a reduction in
the rates preferred business 1t is re-
called, however, that the local companies
are composed of Washington men who have
put their money in the capital stock, and
it is not surprising that they should get
the bulk of the local preferred business.
On the part of the Washington companies
it is denied emphatically that they pro-
posed tHe Increase III IilelCdHti.e liShs, anu,
as stated above, they will not advance
these rates.
Advantages of the Changes.
While a good deal Of criticism, from the
representatives of the local companies
well as from some of the agency companies,
Is heard. there are those who look upon the
action of the committee of the greatest
value to the insurance interests of the city.
IF the committee had done nothing else
said a representative of local company
today than do away with the relief fea-
ture they would have performed an i'm
portant service. 1t is my opinion that the
companies lost more through this right to
go to the board and have a new rate fixed
to meet competition than will be the case
from any underwriting that may now be
done. The important feature of the report,
however, according 10 my mind, Is the
equalization of rates which has been at
tempted by the committee. Every one ac-
knowledges, l think, that the present rates
on mercantile risks do not give profit on
the business, it is carried at a loss. 1t
was wrong principle, and now that evil
has been corrected. The reduction in the
rate on preferred business was Simply in
line with the effort toward uniformity. II
is my belief that after the disappointment
has worn off and men have chance,
they will have, to think the matter over,
every one will acGuieSce in this arrange
ment and there will be such disturb
ance in insurance circles as a rate war.
THE RAILWAYS OBJECT.