New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-02-20
FIFTY-FOURTH ANNUAL REPORT
CONNECTICUT
MUTUAL LIFE INSURANCE
COMPANY.
To the Members


our affairs its own varying elements both OF dim
Guilty and OF advantage. growing out of those gen
eral conditions which affect the outcome OF the
several lines OF action which collectively make up
our business operations
The notable adverse elements encountered in 1899
were the remaining depression IN real estate follow
ing the panic Of 1898, with comparatively small de-
mand with fewer sales than foreclosures still.
something OF increase in the expense account
for the care and repair OF forecIosed properties,
rents still below the normal scale, very low
average rate Of interest throughout the year, at
In the late months OF the year. owing to the dis
turbances growing out of the former speculative
checked by events in Europe and south Africa. a
decline in the market values OF securities OF the
neIiest craze Such decline does not anect the
INTRINSIC value Of nor the income from these securi
year the market values OF stocks and bonds. mark
ing them up when they rise in price and marking
of our assets and that factor in our surplus vary
arbitrarily from year TO year Perhaps fair in
OF OF securities Is the fact that on cost OF 81 Sa-
4et+9 there was shrinkage in market value, Jan
go 900 ~ ~ as against January 1879 o. only MY
$3.50 $500 ess taan per cent or thelr Cost out
SIM 49,, Ion our assets anl surplus lgss ~ I
prices remained unchanged.
Happily, all the other incidents OF the years
Perience have not only been favorable, but some
Oh 'htm give hopeful promise for the future.
A. for many years past. the proportion of lapses
and surrenders has been very small The company
has not been put 10 heavy expense under the pres
eEt unfortunate and unnecessary conditions Of
those causes Without any change in standard
method i has further increased its business in
32sS5 and its net ledger assets by 800 20 This
increase though not srikingly great Is thoroughly
has 10 come out of our old poIicy-hOders through
creased cash payment by them.
While the mortality in 1899 somewhat larger
than that in 1898 it was far within that expected
s-2s 2s7 AMY ''''e anu "'aue wing u
The savings from greater interest earnings and
han lad in o1rv1 af-
cua tons Of premiums and reserves and from other
sources, while not as large as in some former
surplus during the present year on the same scale
a. for several years past
Surplus IA Protection.
For some years past the savings from interest
expenses, mortality and otherwise have slightly
Ceeded the amount annually returned policy
holders. We have felt that our first duty 10 them
in dealing with the surplus sufficiently forti-
y me company against every foreseen contingency
These contingencies We have kept constantly in
mind and have tried to duly estimate and guard
against their possible effect They relate prtnci-
paly 10 the outcome OF forecosed real estate pos
sible depreciation Of other assets. temporary high
- 5 "a e an SOaI Atehse account anu d more
While our fOreclosed real estate has in the past
anv different experie1ce in tha f5rIIre We realize
that while may expect a profit in many cases
in many others must expect have al
ready had, more or less loss. We cannot act upon
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
ne STEADY course OF business from any or all OF
these causes an ample surplus is the only suffi-
tom 'u i'u' TINS Is not us only n'sn 'u'-
steadyfng Effect of Surplus on Dividends.
! The membership of The Connecticut Mutual con-
/ sistS very largely Of those who have been led 10
value life insurance $ a protection TO the family
J and consequently they regard It matter OF
absolute personal duty. In this sober view OF IT'S
! true use and imperative Importance they realize
now necessary IT is 10 them that IT'S cost should
be made as small as possible. in order that for
/ every dollar they can eXpend for IT, their families
I is the end TO which The Connecticut Mutual shapes
members may carry on their policies with the
greatest ease and certainty. II seeks to give them
not only the lowest practicable cost each year, but
steady low scale OF cost. In returning its sur
distribution which takes due and fun account OF
its average mortality expenses. interest. and other
! sources OF saving When its experience has been
little more favorable than that average, instead
year, and using up the small excess OF earn
ngs over the average, and having to drop the next
far more useful 10 IFS members and OF far greater
policies in force to lay aside any such little excess
against the day, certain to come when the pend
| less surplus saved the accumulated gains Of the
maintain the same scale Of dividend and the same
low rate Of cost; until perhaps a return Of more
/ capacity. or. until the less favorable conditions
and lower scale Of distribution becomes measure
! Of prudence or Of necessity.
II is for both these purposes-for terrifying the
/ companys financial condition against any foreseeu
/ possible adversely and for continuing as long as
possible a steady scale Of increasing dividends and
! consequent decreasing cost-that The Connecticut
Mutual has carefully husbanded the resources from
/ its savings over and above average scale The
/ tons of the last two years when from an IN
usual and We hope. only a temporary fall in in
| average has been made, and when, but for such
! former accommodations. lower scale OF division
/ might have become already necessary.
Il is unsafe 70 prophesy. II is impossible 70
make promises. 1t is wrong TO encourage hopes
that may easily defeated by causes beyond our
at least While many others have found it necas
/ sary reduce dividends, in the past
! enables US 10 maintain the same scale; and We
! not without hope that a favorable change in CON
! by this company unnecessary Tor some time %
/ come. We shall do all in our power 70 that end
frankly met and you will be fully advised Of their
( effect
CommissIOner's Examination
Every four years the Insurance Commissioner Of
/ Connecticut is required by law 10 examine every
} company chartered by the State, verifying its ac-
it's business This Company was so examined dur, o.
ing the past year.
( The only point Of doubt was as TO the present
value OF our forecIOsed real estate. From his ap-
/ praisals the Commissioner estimated the present
value at t4s5 than this estate has cost
( on our books. The difficulty OF getting a reliable
appraisal in a dull market may be Illustrated by
the fact that parcel appraised at s45 90
half Of II has since been sold for $4,000 cash for
uses which increase the value Of the remainder
. We have several pieces, some very valuable which
now cost US nothing They are what remain after
( parcels of which they were a part. None OF these
were appraised. Many pieces on which We may
reasonably expect some gain were not appraised
some which may lose were not appraised
count If ann should be taken Of the shriIsge -
estimated by the Commissioner?
leaf from own experience in these matters
may be instructive: In 1879 the Commissioner made
/ an examination and appraisal OF every piece OF
property foreclosed likely be foreclosed These
/ properties cost S125s7, sss The Commissioner