The age-herald., 1902-02-22
FIRE INSURANCE BEING ADVANCED ID PROTECT CO.'S Increase of 25 Per Cent May be Expected in Blr-
 mingham
BIG LOSSES FORCE ACTION
Discussion of the Insurance Situation By Prominent Underwriters Who Inslst on Taking 6uslness- Like View of Present
 Conditions.

While the fire insurance companies have not yet advanced the rates in Bir- mingham, local agents are looking Tor instructions to raise. A 2b per cent in- crease may be expected almost any day. There has been an advance of 25 per cent in Atlanta and every city in the country is being put on higher basis.
 Insurance men say that only by increas- ing the rates can the companies hnd sal vation. The steps taken by the managers in New York for the 25 per cent advance are regarded as wise, and the fnsuring public, 1t is believed, generally endorses their action.
 Asked whether Birmingham would come in for horizontal advance or only A partial or a classified advance, an un- derwriter said last night that he was in- clined to think 1t would be horizontal, A concern paying now $l IS a hundred will probably have to go up to a little over H. 40, and a resident owner paying now 75c will probably have to go up to about H. Of course no advance can affect risks already in force. It would be only new risks that could come under a new rating.
 Disastrous Years.
 A prominent agent remarked yester- day:
 "For the past five years the business has been disastrous, so much so that number of companies have either rein sured or retired from business while great many foreign companies have either amalgamated or withdrawn from this country
 'The loss ratio has increased to an ex- tent which, coupled with the heavy ex- pense largely attributable to the burden some taxation of states and municipali- ties make the present rates entirely in- adequate to meet losses
 ."The companies are confronted with the proposition of either demanding ln- creased rates or refusing to sell their poll cies at existing rates. The companies have carefully classified their business and have ascertained that certain classes of risks have produced during series Of years nothing but a heavy loss. Especial lv ia this true of stocks of goods and manufacturing risks. After a careful consideration of the situation the conciu- sion has been reached that judicious and intelligent advance of rates. particu- larly on the classes named, Is necessary not only to enable companies to have some reasonable prospect of a margin of profit, but to guarantee the indemnity offered the public.
 Several causes have led to the pres ent condition of affairs chiefly the in creased hazard from the general elec- trical installation and from the reduction in rates which heretofore existed. This is a question in which the insuring pub lie as we'll as the companies are vitally interested, and while 1t is not the pur- pose or the desire of the companies to collect higher rates than are absolutely necessary it is their duty both to the public and to themselves to ask for such rates as will enable them to live and furnish the public the necessary indem- nity which is the basis of all commercial transactions"
 Compelled to Take Action.
 Another insurance representative said:
 ''The persistent increase of the fire waste in every section of the country and the steady decrease Tn rateS seems to have destroyed all hope of improvement. As a result the companies have been com pelled to take the matter in their own hands and demand such an increase in rates as in their judgment may be neces- sary to put the business on 8 paying basis
 "When we consider the relation of fire insurance to our system of credit and the entire commercial and industrial interest action is as necessary to those who seek the protection of insurance against the day of disaster as 1t is to the companies themselves.
 "The office of the underwater is not to furnish money to pay loses. His mis- sion is merely to distribute over a great multitude. or over vast areas, the loss l which might fall with ruin upon one | individual community. If therefore, ho l does not collect such average rates as | will enable him to perform his office 1t | is evident that he would have to retire | from business or be unable to meet his | obligations.
 Impairment of confidence In the gen. eral character and security of insurance would be nearly as disastrous to our com mercial interests as lack of confidence in our banking system and conditions have reached the point beyond whicl this confidence could not be maintained without an increase of rates on oommer. cial and special risks throughout the country.