The aegis & intelligencer. [volume] (Bel Air, Md.) 1864-1923, 1901-02-15
FIGURES THAT TELL.
THE W0NDRous STORY OF THE DOC
Urine OF AVERAGES.

Stone of All Successful Insurance
Business-The Scope of the Modern
Mortality Table.
1.-THE doctrine of averages Is q wonder
full thing" said a prominent New Or
leans insurance man, chatting In his office
few days ago. 1T is the foundation of
all successful life insurance, and before
sufficient data were accumulated to form
the basis Of the calculations we employ
today there was no such thing as a per-
fectly safe and stable company, no mat
| ter how large a capital it might possess.
| Now all that is changed. We have the
| carefully compiled statistics of more than
hundred years, and we are able to fig
urs out to a nicely the average life Of
civilized men. We can't tell how long
you personally are going to live, but we
can tell with marvellous eXactness how
long 10000 men of your age and general
condition will survive upon the average.
1.-THE modern mortality table as 1t is
called, Is striking example Of patient
research and sagacious reasoning. 1t Is
built up from the vital statistics Of thou
sands Of towns and cities and covers
from three to four generations. Without
1t we would be completely at sea, for we
would have no means of determining how
much we should charge policy holder in
installments, otherwise premiums, for a
certain sum, payable at his death. By its
aid we are able to compute the amount
to a nicely, and, while some die earlier
and some later, the average will hit the
figures of the mortality table to within
less than 30 days. When you come to
think about 1t, that is an astonishing
achievement, and we are growing more
and more accurate all the time. I'VE are
going further and further into details and
finding out the precise effect of different
conditions and climate and surroundings
and vocations on the duration of life.
The mortality statistics Of the future will
be as exact as the multiplication table.
"This great principle of the doctrine of
averages" continued the insurance man,
sis being rapidly extended into curious
and interesting side fields. The bond
companies which furnish surety for all
kinds Of employees, public and private,
simply insure mems honesty and do it on
exactly the same basis that other compa-
MES insure mems lives. Instead of NOR
tally tables they use what might be CALI
ed 'probity tables They calculate, in
other words, what percentage of men will
steal among thousand or 10000 trusted
servants, surrounded by certain similar
temptations, and their figures are based
on exact records. There is no sentiment
about the matter. They say, in effect, to
an applicant for bond, The odds that
you will turn thief are ! to 400 or to
900 or whatever the case may be, and we
are willing to assume the risk for such a
sum, payable annually
"All sorts Of side questions are being
probed into: Is an employee more likely
to steal from q corporation than from an
individual? Are married men more or
less honest than bachelors? At what age
do most cases of embezzlement occurf
These and many other questions are be-
ing rigidly investigated, the tendency be-
ing to reduce the business to more and
more of an exact science and incidentally
to reduce the premiums, because it goes
without saying that the greater the &C
curacy Of the calculations the slighter
will be the risk. The old style of getting
q bond was to go to a friend and ask him
to hazard a considerable amount on your
integrity as a personal favor. 1t was
embarrassing to both sides. The new
style is to go to surety company, which
replies: All right, sir. Please step up
and have your honesty measured on our
scale of averages In time the breaking
strain of all men will be correctly graded.
1t won't mean that any particular chap
in, for instance, the $4,000 class will
steal when he gets a chance to secure
that amount of plumber, but that a speci-
fed number in, say, 10000 will be moral
ly certain to succumb before such temp
tation.
1.-THE employers liability associations
are another development Of the same sys-
tenn. They insure against certain mis-
haps that used to be regarded as mere
freakish visitations of Providence. Look
ing at the matter from n cold business
standpoint, the statistician has figured
out how many employees will tumble
down stairs, mash their fingers, fall into
elevator shafts, get caught by betting and
do other painful and disabling things in
a given space of factory or shop. They
calculate upon so many accidents per
annum to so many square feet Of floor,
and although such things would seem to
be contingent on the purest chance their
statistics have proved SO exact that the
business of these associations Is on al
most as rigid a basis as that of an old
line life insurance company. The indem-
nifty, you understand, is to protect en-
ployers against damage suits, and instead
of leaving that item as an indefinite
menace to profits a firm is now enabled
to set aside a certain amount annually
for premiums and may consider the risk
as ended.
Burglar insurance Is still another illus
tration. Knowing the size of a city, the
number of its police, its annual record
of arrests and certain other particulars,
the expert is able to calculate with con-
siderable exactitude the risk run by each
householder of being looted by midnight
providers. It seems little fantastic,
admit, but am told that the business Is
a decided success. In the same line are
cyclone insurance, window glass insur-
ance, crop insurance, live stock insurance
and a hundred and one special varieties
that are multiplying every day. In Eu-
rope they have gone even further than
here, and there is hardly line of hazard
upon which one can engage for which it
Is not possible to secure indemnity from
loss. But II all resolves itself down to the
same law of averages, and the sum total
of varied statistics continually being col
lected by the agents of the different COM
panies is vast almost beyond belief. The
government spends q large amount OF
money every year in its statistical bu-
reau, but the information which 1t coll
lates is only q drop in the bucket COM
pared to that secured by the huge army
Of insurance investigators. Their aggre-
gate data have been an immensely impor-
tant contribution to the sum Of human
knowledge."-NewO Orleans Tmes-Demo-