The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-06-05
EXPENSE RATIO 100 HIGH.
STATE INSURANCE COMMISSIONER
DEARTH PREPARES THE THIR-
TIETH ANIMAL REPORT
INcENDIARY FIRES INCREASE
MIR. Dearth's Report shows a Large
Amount of Tsusiness Transacted.
but He Says Expenses
Must BE Less.

The state insurance commissioners Of
ice has received the first proof of the
th1rt1eth annual report of that depart
ment, which, beside containing compi-
lation and tabuIation of figures. which
have been printed from time to time, and
review of the business of the depart
ment, the report contains a number of
suggestions to the governor and legisla-
ture as to needed amendments to the
insurance laws, and notifications of the
provisions of the existing laws.
Under the head of General Remarks
on Fire Business for $780," the commits
Sioner says in part:
While the sworn statements filed with
TINS department concerning the financial
condition and business transacted, as OF
the year ending Dec. 81, 1900. show
Ialrly healthy condition on the part of
majority of the companies, still the ex-
per1ence of the companies in the way OF
losses has not been as disastrous in many
years. ~cN
The total net loss on underwriting
by all companies operating in the state
OF Minnesota was S94 $3.50. In otner
WORDS, II cost the companies this enor
nous amount in excess of their total pre-
MUM receipts Tor the year. In spite OF
this fact, however, there was a total net
increase IN surplus during the year Of
$l,6l4,5H 49, The dividends declared by
American stock companies were $5,S7I,-
1868 ~ while the United States branches of
forelgn country companies received from
the nome office in excess OF what was re-
turned $537 434.
while there were heavy losses on &C
count OF underwriting, it appears that
the net investment earnings OF the COM
panies during the year were SIS, 401. $40. A.
IL was due to this source that the COM
pan1eS We're able to show the increase in
surplus earnings, after taking care of
the heaVy losses on account of under
writing, together with the dividends de-
n hnva -1S Int fn,. r /,
investment of the companies there would
have been net, loss on the business for
the year of nearly $,000,000. The large
increase in stocks and bonds as well as
other collateral In which the assets of
the companies are invested accounts
very materially sforal the surplus earn
inES.' - go l-
The expense ratio which, for last year
was 43 per cent, Commissioner Dearth
characterizes asa top high to the COM
panies, as we'll as to the insurance pub
lie, the necessary security. The increase
during the year he considers unwarrant-
ed and unjustifablel. from the fact that
1t was disproporti0nate to the new bust
ness secured. There is room, he argues
for improvement9inrtthe management ex-
penses.
From the factstthaF 80 to 40 per. cent of
the fires of last year were attributed by
the authorities who had to deal with
lneIn 10 lncendlaf1Sm Is used by the COM
missioner as an argument in favor of
fire marshals, and in connection with this
question he states that unless something
is done to reduce Inc percentage of losses
there Will necessarily be a general ad-
vance in premium rates.
Mutual fire insurance companies, he
says, should not be allowed to charge
full stock company rates, or their mem
bers will be led to expect that no fur
Their assessment will be made They
should, he thinks. have mutual premiums
paid regularly. at least every six months
under the name of assessments
The township mutual companies he
says, have succeeded in reducing the rate
on farm property from rs to II cents per
$780, and have saved the farmers 81. 200
600. -