Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-14
LAPSES IN INSURANCE.
Some Interesting Statistics
bv Haley Fiske
OF METROPOLITAN LIFE
DETAILS OF INQUIRY BY NEW
YORK COMMITTEE TODAY.
Exhaustive Examination of the Cost Of
Getting New Business-Mr.
Hughes Comparisons.

NEW YORK, December 14.-Haley Fiske
vice president of the Metropolitan Life In
surance Company, was the first witness to
testify before the insurance Investigating
committee today. When the committee ad-
journed yesterday Mr.. Fiske was reading a
statement of the lapses in the Industrial
department of his company's business. Mr.
Fiske made further statement on that
subject today.
Mr.. Fiske asserted that lapses cause no
serious loss to the insured, the average
amount paid on lapsed Industrial policies in
1900 only 72 cents, for which the IN
sured received protection for ten to twelve
weeks. The total loss to the company on
lapses in 1900. Mr.. Fske said. was S1,070,
900; the number of policies Cancelled was
bI5,392, and the average loss to the COM
pany was S1.s6 a policy. Charles E.
Hughes the committees counsel, examined
the method by which the company arrived
at those figures.
Mr.. FIske said that more than 5000
agents left the employ of the Metropolitan
company in 1904. 1t had about 200 agents
In its employ at the beginning and about
the same number at the end of the year.
Comparison of Business.
Mr.. Hughes went into an exhaustive ex-
animation of the items composing the cos-
o. getting new business in 1904 in order 10
compare 1t with the estimate on new busi-
ness in that year The company estimated
tho cost of putting a new policy on is
books at S2O7. Each holder of lapsed
policy paid an average of ~ cents to the
company, making the net loss I.35 on eacn
policy. or S653, 600 To this the company
ADDS additional loss to the company Of
BIC cents on each policy for carrying the
Insurance.
This Mr.. Fiske said. makes total loss
a 81 90 l., 80,
900 policies. The company, he said. makes
its premiums high that the policy hold
ers who persist in holding their policies
cover this loss. Mr.. F'iske said the ex-
penses of doing industrial business are high.
but are unavoidable. After twenty-five years
of operation 100000 policies are in ex-
istence in the United States. In some cities
the number Of policies equals the numbers
Of persons therein. The people are bound
TO have such insurance. and II they cannot
get II will take insecure or assessment m
surance.
Insurance and Lotteries.
Mr.. Hughes said the argument that the
insurance is widely taken and therefore it
fills a want would apply with equal force
TO a lottery and he said 1t appeared that
the speculative feature of industrial insur-
ance appeared too prominent as so large
proportion of policies lapse. Mr.. Fiske said
this is Offset by the fact that the people
who lapse revive their oplices and that 1t
is unfair to assume that they get nothing.
Mr.. Fiske said Industrial insurance mas Sc
cured the favor of the people and should
not be disturbed.
Mr. Hughes asked what could be done
to reduce expenses and Mr.. Fiske said the
salaries of officers is small fraction of the
whole. The saving, he said, must come by
retaining agents in the employ of the COM
pany and by preventing lapses Mr..
Hughes brought out that all the profits of
the company come from its industrial busi-
ness and that it derives profit from its
ordinary business, which was started for
the benefit of the agents only.