The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-10-24
Says Companies Are Not Making
Much Money.
NO TRUST FOR THEM,
Report of Combination to Keen
Up Rates UnfOunded.
Prices Charged i'm Kansas
Really Too Low.

SSSAC q VI Il0
Shawnee Fire Insurance
says that the public does not under
stand the situation. He de-
MES there is such a thing as a fire
insurance trust to regulate rates. Mr..
Going said today: -
There is a prevailing opinion that
the fire Insurance companies are
banded together, and that the prevail
ing rates result from az combination.
trust OF agreement. 1 am sure thai
the use of a microscope, or even a tel
escope would fail t. disclose such a
condition. for it does not exist. How
ever, it is my opinion that insurance
companies should be compelled by
law to charge the same rates, Chat is
the rates of one company should be
he same as those of another.) 1t
should be as unlawfu for a fire in
uranc company to- discriminate in
rates, as it would be for a railroad
company. They both occupy the same
relation to the public.
"A fire insurance should
not be permitted to. discriminate in ia
vor of one of it's customers to the de-
triment of another, for it would tend
to the one and to dis
courage the other.
1T is the popular belief thai fire in
surance rates in Kansas are too high,
Jul l. w IOI IL lake III
statement that they are too low. The
average loss ratio. in Kansas for TWEEN
ty-two years. is owe So per cent,
which is close to the danger line. This
average is also reduced by the loss ra-
tics of previous years. In 1885 the
loss ratio was a trife over 38 per cent,
While in 1905 it vas over 66 per cent,
and in 1906 Al per cent.
THE average loss ratio for the past
ten years will disclose that the insur-
nnno ma MAC in KnnCoC oro Loo uin q
more in the state than they are TAX
ing out. I am aware of the fac that
this is contrary to the popular belief,
but I am reciting facts and not evolv-
ing theories. Adequate rates are nee
essary for solvent insurance COM
panies.
: ITO have the state infested with ir-
responsible companies from outside or
the inside would be a calamity
almost as destructive as a visitation of
grasshoppers. ~
Missouri is now engaged in a war;
fare against a certain class of COM
panieS who are seeking to remove
their domicile from that state and
from other states to Kansas IRE
companies do not make lower
rates for responsible merchants. In
surance companies that cut rates will
be compelled sooner or later to cut
their losses. This fact is patent to
anyone who will investigate the sub
"The insurance department of Kan
sas stands as a bulwark to prevent the
people being imposed upon by COM
panies lacking integrity and financial
responsibility. The law contemplates
that the occupant of he position be
versed in insurance. and the men who
honor upon themselves and
the state. The present incum-
Mr.. Barnes, is UNFOLDING the
dignity of the office, and 1 am sure he
49, H. Io-4-1o1 nnAn To fn1lnU- bic
predecessors in preventing the people
of this state being imposed upon.
"The business of fire insurance from
a national standpoint has afforded but
a meager profit to the fire insurance
companies. Fol- the. past twenty years
the profit in underwriting will not ex-
coed two per cent on the invested cap |
ital. What little non is derived
the business is from the invest
ment account, as will be disclosed by
consulting the statement of any COM
The investment account of "a
insurance company bears the same
elation to it's business that advertis- |
would to the daily newspaper. The
fire underwriting is the subscription
list. The average newspaper would
max about the same prof1ts from its
subscription list alone that the insur>
ance company would make from its
fire underwriting.
Fire insurance companies should
be conf1agratiOn proof and, in order to
tn ems elves in that position, rates
should be sufficient that reasonable ac- |
cumulations could be made to provide
for these contingencies which occur at
intervals. -s
st again repeat that rates are too
low and not too high. For a fire in
surance to cut a rate should
be equivalent to cutting it's throat, n !
should be prohibited by law.
The laws of Kansas and of the 9TH
er states very properly require fire in
surance companies to maintain a re-
serve. This would be absolutely mean
Ingless and without force and effect I'M
adequate rates were collected. A
insurance company that collected
4 rate so per cent less than it should
be. would necessarily have it's reserve
depleted to the same extent. The re-
serve is a protection to the policy