The San Francisco call., 1904-02-10
FIFTY-EIGHTH ANNUAL REPORT
Connecticut Mutual Life
Insurance Company.
To the Members:
OF THE

To the Members:
From the point of view of life insur-
ance companies as investors the most
striking incidents of the year 1908 were
the great shrinkages in the nominal val
ues or prices of the stocks of the railway
systems with a corresponding though
much slighter shrinkage in the prices OF
their mortgage securities.
In only one point was the Connecticut
Mutual affected by these events in com.
mon with all investors in securities OF
the highest class. The present market
value of it's corporate and mun1clpal Sc
curities shrank during the year about
3IlO,00O on par or $20,oS6,otV, costIIs
$50. .906.461, with a present market value
of S26.339.694 Of this $99, 9,46O.25 is in
bank stocks; s729.616 in railroad stocks
(s250.00O of which is held as collateral D.
which have changed little; the S25.O17,-
3S4 of bonds are of the best class Tor Sc
curity, and having as rule many years
TO run. more favorable market cOndltions
are likely to restore more or less or Tor
mer higher prices: but meantime the ap-
parent gross assets ahd surplus are Just
so much less than if prices had been
maintained throughout the year
GENERAL RESULTS.
The Company's experience for the
year 1903 in the several other features
incident TO it's business may be briefly
stated as follows: An increase in its
premium income; an increase in interest
! income. an increase IN net assets, lne
usual persistence in it's policies; an in
crease in the business in force; the same
low rate of expense as in 1902; a NOR
tality loss very considerably less than
that expected. with saving thereby of
$4S2510: decrease in the holding or
! forecIosed real estate OF $773 920.91. The
details of the years operations will be
found in our financial statement
That we have been able to maintain
our traditional low rate of expense and
yet keep good the amount OF business IN
force is due to the faithful zeal OF our
agents for the true ideal of mutual life
! insurance company; the best service Tor
/ their clients at least expense to them;
and this in face of the high commissions
given TO insurers by other companies.
| very difficult to withstand by the one or
J to overcome in the other.
The death rate inevitably varies some
what from year to year. and that for
| 1903. while very favorable. wSs some
what less so than in 1902 The care with
I which our risks are selected and the
healthful character of the limited terri
! tory in which we operate have given US
very favorable experience throughout
our history and are the reasonable assur-
ance of it's continuance.
INVESTMENTS.
The additions and improvements upon
the Home Office properties have been
substantially completed. We have
I building which for durability, conVen-
I ience and attTactiveness as business
Z
proving good investment at it's cost.
Ever since the panic of 1893. and due
in some part also to the flood OF stocks
and bonds of corporate enterprises or All
sorts of quality since offered TO the pub
/ lie on more or less attractive represen-
tations. the market for real estate has
remained in the quiet state into which IL
then fell. During the last year. now.
ever. we sold properties that cost US
SSSS.3S9: "a of these sold at some proht;
l5 sold at loss; the net loss on these
q rHnNe VNrafr = n n
that incurred on three pieces which came
to us from some loans made many years
ago upon properties the conditions OF
which changed unfavorably afterward.
In this connection IL will be of interest
to state that during the year the Insur-
ance Commissioner of Connecticut has
made the examination or TINS company
required Of him by law every four years.
/ i'm the course of which he valued the
/ fOreclosed real estate remaining after
Z deducting the sales of that on which the
I loss was made as above noted at S349.-
1929 less than its cost. AS his valua-
tion is but an estimate and we have
sold several pieces since at considerably
more than his estimate, and as our
whole experience in these matters has
shown that such valuations have been no
guide to the outcome. we have made no
change on our books further than to take
up as a possible future loss the item or
$34974239 as a liability under the head
of Contingent real estate depreciation
account" thus giving practical present
!
incurred.
We shall pursue the same course with
our present real estate which has given
/ us good results in the past; hold until
local conditions favor sales at falr
The only bonds on which interest is in
default are those of the City of Calves
ton. payment having been suspended in
/ consequence of the flood of 1900. The
city's liability is unquestioned-
REDUCTION OF DIVIDENDS.
One of the principal events for us in
! the past year has been the decision of
the conditions which have been progress
sively developing for the past ten years
and more it was no longer eXpedient to
draw so heavily on past accommodations
of surplus in order to maintain the high
scale of dividends which has obtained
since 1881. and that it was eXpedfent to
reduce dividends to conform more nearly
at least 10 the present aDlllJy 10 earn
surplus Since 1898 we have used current
accumulations and have also drawn upon
the then surplus to a very large amount
Z in order to postpone as long as might be
any reduction in DIVIDENDS the prlncl-
pal cause of our inability to earn as
much surplus as during the years from
1881 to 1898 has been the slow but
steady decrease in the rate of interest
realized on investments which would
have caused a much earlier reduction of
dividends as was the case with Otnef
companies. but for the economies prac-
ticed in the mana cement.
The circumstances of this reduction,
which has been foreshadowed in our re-
ports for several years. are set forth IN
full detail in a communication addressed
to our policy-hOlders which is being
placed in their hands for their full infor-
nation. 1t is. therefore. not repeated here
except to say:
While we have always striven. and
always shall strive, by every legitimate
means TO make the current cost as small
as possible we must never lose sight of
the fact that insurance which is not Sc
cure is rot worth paying for and that.
while we strive to make IL cost as little
as may be we must be certain to make IL
cost enough to keep it indUbitably Sc
cure against all fore seen contingencies
incident to business and to the invest.
ment of funds during long periods of
time"
'It is proper. under the circumstances,
TO repeat: the Company's business con-
tinues to he conducted upon the same le-
gitirnate lines and by the same stand