The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-02-24
FIFTY.FOURTH ANNUAL REPORT
OF THE
CONNECTICUT
MUTUAL LIFE INSURANCE
COMPANY.

To the Members:
Your careful attention is asked to the
itemzed financial statement which accom-
panies this report
Each succeeding year brings TO the con-
duct of affairs its own varying ele-
nents both of difficulty and of advantage,
growing out of those general conditions
which affect the outcome of the several
lines of action which collectively make up
business operations.
The notable adverse elements encoun-
tered in 1899 were the remaining depression
in real estate following the panic of 1893,
with comparatively small demand, with
fewer sales than foreclosures, still some
thing of an increase in the expense &C
count for the care and repair OF foreclosed
properties, rents still below the normal
scale, very low average rate of interest
throughout the year. affecting a considera-
bic volume of investments and in the late
months of the year, owing to the disturb
ances growing out of the former speculative
abruptly checked by events in Europe and
South Africa, decline in The market val
ues of securities of the highest grade. Such
a decline does not affect the intrinsic value
of nor the income from these securities.
But, being compelled by law TO show each
year the market values of stocks and
DOnCS, marking tnem up Wnen tney rise III
price and marking down when they fall,
the process makes that item of our assets
and that factor in our surplus vary arbi-
trarily from year to year. Perhaps fair
index of the character of our holdings of
this class of securities is the fact that on
cost of SO, 1919 there was shrinkage
in market value Jan. i, 1900, as against
JAM /, 1899, of only $l95, 429; less than / per
cent of their cost but making both our as
sets and surplus less by the sum named
than they would be had the market prices
remained unchanged
Happily, all the other incidents of the
years experience have not only been favor
able. but some of them give hopeful prom
Use for the future.
AS for many years past, the proportion of
lapses and surrenders has been very small.
The company has not been put to heavy
expense under the present unfortunate and
unnecessary conditions of competition. to
replace a large loss of old business from
those causes. Without any change in
standard or method, ii has further in
creased It's business in force by 1858, 636
| and its premium income by S164.32S.S5 and
its net or ledger assets by 500, Sill 49, This
increase, though not strikingly great is
thoroughly healthy. 1t has not been pro-
cured at a cost which has to come out of
our old policy holders through a reduction
in their dividend and a consequent in
creased cash payment by them.
While the mortality in 1899 was some
| what larger than that in 1898 it far
| within that expected by the mortality
table, and made saving of $5232S
| The savings from greater interest earn
| ings and smaller expenses than are pro-
vided for in our calculations of premiums
| and reserves and from other sources, while
not as large as in some former years, have
been sufficient to warrant a return of sur
| plus during the present year on the same
| scale as for several years past.
Surplus as Protection.
For some years past the savings from in
| terest, expenses, mortality and otherwise
have slightly exceeded the amount annual
ly returned to policy-holders We have felt
| that our first duty to them in dealing with
| the surplus, was to sufficiently fortify the
| company against every foreseen contin-
| gency. These contingencies we have kept
| constantly in mind anu have tried to duly
| estimate and guard against their possible
| effect. They relate principally to the out
| come of foreclosed real estate, possible de-
| probation of other assets, a temporary
| high death rate, an unusual expense ac-
| count, and a more or less protracted period
I of low interest rates. While our foreclosed
| real estate has, in the past, taken as a
| whole, shown itself to be worth more than
| its cost, and we know no reason to appre-
| bend any different experience in the future,
We realize that while we may expect a
1 profit in many cases, in many others we
must expect, as We have already had more
| or less loss. We cannot act upon anticipa-
| tons of profits. We must wait till they are
| made. But possible losses we must provide
| against, whether on real estate, or on other
| assets or from excessive death losses or
| any unusual necessary expenditure.
| Against serious disturbance to the steady
| course of business from any or all of these
| causes an ample surplus is the only sufi-
! cient safeguard. But this is not its only
| high function.
Stendying Effect of Surplus on Divi-
| dends.
| The membership of The Connecticut Mu-
| tual consists very largely of those who
have been led to value life insurance as a
| protection to the family; and consequent
| ly, they regard IT as a matter of absolute
| personal duty. In this sober view of its
| true use and imperative Importance, they
| realize how necessary Ii is to them that
| its cost should be made small posi-
| bic, in order that for every dollar they can
| expend for lt, their families may get as
| large protection as possible. This is the
end to which The Connecticut Mutual
| shapes every plan and method. And in or
| der that its members may carry on their
| policies with the greatest ease and certain
ty. II seeks to give them not only the low
| est practicable cost each year, but a
| steady low scale of cost In returning its
| surplus to its members, it long ago adopted
| scale of distribution which takes due and
| Iull account Oh us average MORTALITY, eX-
| penses. interest and other sources of saw
| ing. When its experience has been little
| more favorable than that average, instead
| of slightly increasing the scale of division
| for thai year, and so using up the small
| excess of earnings over the average, and
| having to drop the next year perhaps to a
| lower scale, 1t has deemed 1t far more use
| full to its members and of far greater as
| sistance to them in the long run In keep
| ing their policies in force, to lay aside any
| such little excess against the day, certain
| to come, when the pendulum will swing
| the other way and there will be less sur
| plus saved; the accumulated gains Of the
| past can then be used for time at least
| TO still maintain the same scale of divi-
| dend anu the same low rate of cost, until
| perhaps, a return of more favorable con-
| ditions restores the former earning capac-
| ty. or, until the less favorable conditions
| have become evidently permanent that
| a new and lower scale of distribution be-
| comes a measure of prudence or of neces-
| Say.
1t is for both these purposes-for fortify-
ing the companys financial condition
| against any foreseen possible adversely,
| and for continuing as long as possible a
| steady scale of increasing dividends and
| consequent decreasing cost-that The Con-
| necticut Mutual has carefully husbanded
| the resources from its savings over and
| above an average scale. The wisdom of this
| course appears under the conditions of the
| last two years. when. from an unusual and
| we hope, only a temporary, fall in interest
| earnings, no excess of surplus above the
| average has been made. and when but for
| such former accommodations. a lower scale
of division might have become already
| necessary