The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1900-03-08
FIFTY.FOURTH ANNUAL REPORT
OF THE
CONNECTICUT
MUTUAL LIFE INSURANCE
COMPANY.


which accompanies this report.
Each succeeding year brings 10 the con-
duct Of our affairs its own varying ele-
ments 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
our business operations.
The notable adverse elements encounter
ed in 1899 We're the remaining depression IN
real estate following the panic OF lssS
with comparatively small demand. with
fewer sales than foreclosures still, some
thing Of an increase in the expense account
for the care and repair Of foreclosed prop
critics. rents sim below the normal SCALE.
very low average rate OF interest
throughout the year. affecting a consioera-
pie volume OF investments, ana, IN the iate
months OF the year, OWING TO the ulstur-
Dances growing out of the former specu-
latve financing OF many corporate IN
terests abruptly checked by events in Eu
rope and South Africa, a decline in the
market values Of securities of the highest
grade. Such 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 val
ues Of stocks and bonds, marking them up
when they rise in price. and marking
them down when they fail. the process
makes that item of our assets and that
factor in our surplus vary arbitrarily from
year to year. Perhaps a fair index of
the character Of our holdings OF this class
OF securities is the fact that on a cost of
81. SSl 451. ~ there was shrinkage in mar
ket value January /, 1900 as against jan
uary /, 1893 of only sl95, 40. less than per
cent. of their cost, but making both our
assets and surplus less by the sum named
than they would be had the market prices
remained unchanged.
Happily, all the other incidents OF the
year 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 untor-
tunate and unnecessary conditions of COM
petition TO replace a large loss of old
change in its standing or method it has
further increased its business in force by
ss,3sS,Gj6, and its premium income by sl64,-
s57o,a1.4o. This increase, though not
strikingly great. is thoroughly healthy. Ii
has not been procured at a cost which
has TO come out of our old policy holders
through reduction of their dividend and
a consequent increased cash payment by
them.
While the mortality in 1899 was some
what larger than that in 1898, IL was far
Within that expected by the mortality ia
Die and made a saving OF s52S,2ST
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 10 warrant a return
of surplus during the present year, on the
same scale as for several years past
surplus as N Protection.
For some years past the savings from
interest, expenses, mortality and other
wise have slightly exceeded the amount
annually returned to policy holders We
have felt that our first duty to them in
dealing with the surplus was to sufficient
ly fortify the company against every
toreseen contingency. These contingen-
cles we have kept constantly in mind
ana have tried to duly estimate and guard
against their possible effect. They relate
principally to the outcome Of foreelosed
real estate possible depreciation of other
assets, temporary high death rate, an
unusual expense account and a more ar
less protracted period of low interest
rates. While our foreclosed real estate
has In the past, taken whole shown
itself to be worth more than its cost
and we know no reason to apprehend any
difterent experience In the future we
realize that while we may expect profit
in many cases. n 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 ex-
penditure Against serious disturbance to
the steady course of business from any
or all OF these causes an ample surplus
Is the only sufficient safeguard. But this
is not It's only high function
steadying Eject of surplus on Divt-
bends.
The membership Of the Connections Mn
those
have been led 10 value life insurance as a
protection to the family. and consequent
~ they regard II as matter OF absolute
personal duty In this sober view OF its
true use and imperative Importance they
realize how necessary It Is TO them that
It's cost should be made as small az nos
sible. in order that for every dollar they
can eSpend for II their families may set
as large a protection as possible This
is the end 20 which tho Connecticut Afu-
tual shapes every plan and method And
In order that its members may carry ON
their policies with the greatest case and
certainty. IL seeks 10 give them not only
the .owest practicable cost each year. hut
q steady low scale of cost In returning
its surplus 10 It's members, 1t long ago
adopted scale % distribution which
takes due and fun account 90 its average
mortality expenses interest and oth her
sources Of saving. when its experience
has been a little more favorable than
Ing the scale % division fur that year.
and so using ~ the small excess of earn
iucs over the average, and having 60 drop
The next year perhaps 20 "a lower scale.
% has deemed o. FAR more useful 10 rs
members and o. far greater assistance 10
them Ia the long run la keeping their
ittie excess against the day. certain 10
como. when the pendulum viii swing the
other wsY and ;hcre VIII he less SURPLUS
saved the accumulated gains * The past
can them he used f7r "a time al least TO
gtili maintain the same scale ~ dividend
and the some ,ow rate ~ cost, untii mere
lions restores the former earning cauar-
ity or untH the less faV9rahie conli-
tlons have become "a evidently permanent
that a new ans lower scale Of distribution
becomes A measure % prn1ence OF of ne
ceEsity.
N ls FOR both these purposes--sor f1rti-
fyiuG the conpauFa financial condition
against any fareaeen poEsl bic diversity
aud f1r continuing az long POSSIBLE q
steady s-85e - Increasing dividends AMI
consequent aeCfraairE that fhe Con-
rcrticut Mltual hah carefully huahaud@d
the resources from IFS savings over ani
above an average scale The wisdom of
this course acpeaTs under the conditions
% The last fao years. when. from 40 un-
usual and. We hope only a temporary.
fa1 iB interest earnings. 10 excess - sar-
r'Gs ahore the average has hem made
and when hat far such former acCuuu-
lstion, la~er scale % division might havo
become already necessary.
2, rs unsafe 90 pr rhsgy II Is impossi-
bic 20 ra4ke rforiscv r. % wrong 90 en-
courage haass that may easily bs defeated
tv causes Pc rn4 our cent? 6s. Bat we are
very GLAD that fur fhs present at least
whie many Others have fQlnd 90 ne,eE-
sary 30 reduce dividends ouF course m
ak.- Is |aae ate-s fa- ~.