The news & observer., 1905-06-07
THE INSURANCE DRAIN.
The Life Insurance Business Has
Nothing to Gain From Con-
cC Invent

| Ct--lsttlAt.
To the Editor Much has been said
/ recently about the insurance drain on
the State. Let us analyze the figures
| fairly and intelligently and not at
| tempt to conceal anything from the
public, or prejudice the mind of any
one by stating only half of the truth.
but let us state the whole truth and
nothing but the truth. The Insurance
Commissioners report for last year
1894, is not yet out, SO we will be COM
PEELED to take the figures for the year
1903
All of the old line life insurance
companies including the North Caro-
| lima companies at Greensboro and else
where, received in premiums from
North Carolina in 1903 $3,256, ,3SS.60
They paid out in death losses in North
Carolina $S53,9S3S0; paid out for eX-
penses of management i'm North Caro-
lima. $748,96937, average of all COM
panies % per cent; paid cash on ma
tured endowment policies in North
Carolina, $97, ,691.66, average of all
companies per cent. paid cash on
surrendered policies in North Carolina,
$439, 9,612.46, average of all companies
1856 per cent; paid dividends to
policyholders in North Carolina, $651.-
27772. assumed average 20 per cent.
Total amount paid out by life com
panies in North Carolina, $2,79E-
535.01.
Thus it will be seen from the figures
given above that the life insurance
companies doing business in North
Carolina paid out in cash in this State
in 1903, an aggregate sum of $2,791,-
535.01. In making the calculations
stated above I took the average per
cents realized by all of the old line
life insurance companies doing busi
ness in the United States, and used
the average per cent. to get the cor
rect percentage with which to figure
the amounts paid out in this State.
For instance the average expense
ratio of all the life companies was %
per cent, so / took % per cent. of the
premiums received in North Carolina
as the amount paid out in this State
by the companies doing business here.
The total receipts as stated above
were $3256.3SS 60. and the total dis
bursements $2791 535.01, which leaves
a difference of $464, ,S53.59. Bear in
mind that the receipts of our home
life insurance companies are included
in this difference Consequently it will
be seen that the life insurance COM
panies paid to the citizens of this State
almost as much as they received. and
If the increased cash values of the
policies are taken into consideration,
and the hundreds of thousand dollar
loans in this State by the companies,
the people of this State certainly
profited by the years transaction; even
viewing the matter from a purely
mercenary standpoint, and life insur-
ance ought to appeal TO a higher and
nobler sentiment in the human breast
than that of sordid and selfish gain.
The average business man doesn't
understand the great system of life in
surance and the fundamental princi-
plies which underlie il and it is not
expected that he should and when we
see it stated that the companies re-
ceived SO much in premiums and paid
out so much in death losses, we are
apt to jump to the conclusion that the
difference was all profit We do not
stop to think of the dividends we re-
ceived every year from the companies;
the expense of management; the
amount paid in cash to medical exami-
ners throughout the State and the
amount paid the State in taxes, fees
etc. We forget the amount the COM
panes pay out each year in cash ON
policies that are surrendered and the
amount paid in cash on endowment
policies that mature.
The life insurance business has
nothing to gain from concealment, and
any company which cannot stand the
most rigid and searching investiga-
ton, is not entitled to public conf
dence. II is a business which touches
either directly or indirectly every
home i'm the state. 1t is of such vital
importance that l feel that when any
one writes on the subject he ought o
inform himself of the facts and not
state only half of the truth, which is
sometimes the worst kind of falsehood.
so far as results are concerned in mis-
leading the public.
JOHN G. DREWRY.