The independent-reporter. [volume] (Skowhegan, Me.) 1909-1955, 1913-01-16

clause. He was not aware of the seri-
BUSINESS OF this violation in fact cir
cumstances showed that he believed
vacancy was permissible. We men
ing to the attention of the public the
fact that in great many instances an
tipathy and antagonism against insur-
ance companies Is wholly unfounded
and unwarranted. Probably no bust
ness is SO misunderstood by the public
as fire insurance. Our attention, to he
sure, has been directed to what seem
ed to be unnecessary delay on the part
of certain companies in the adjustment
and settlement of their claims, but
even these cases had mitigating cir
cumstances. There is probably no
conducted entirely by saints, but our
short experience has demonstrated
that insurance is as free from crooks
and undesrables and any class of bus
mess. We are satisfied of one thing
that the idea of the general public that
insurance is honest only when made
so by law, is erroneous. Insurance is
a necessity, and therefore better UNI
Outstanding of the insurers business
by the insured is necessary.
We desire to present briefly some
facts that have come to our observa-
ton and other facts that reflect the ex-
perience of those who have devoted
much time and study to the subject.
Statistics gathered by the National
Board of Fire Underwriters show that
fire insurance companies, instead of
earning the per cent, net profit which
it expects as compensation for the
risk which it assumes, have actually
lost on every dollar of indemnity sold
during the ten year period ending De-
cember 81, 1910. No fair minded man
will say that 5 per cent. is too much
to expect, for safer forms of invest
ment bearing the same rate can easily
be obtained. AS has already been no.
ted the excess of losses paid over pre-
miums received by companies of other
states and countries for the year 1911
in Maine amounted to 1858, 59S.47 This
vast sum must be made good in some
way and the natural way is to increase
the rate. We can conceive of few
classes of business that could stand an
annual loss of their gross sales for ten
years and survive, and as a matter of
record. fire insurance has only man
aged to keep its head above water by
! resort to the issuance of new stock,
| by assessments, and the fact that the
character of their investments is such
as to produce an annual profit. We
refer to this matter, first because OF
the inseparability of fire waste and
fire rate, and second, to dispel from
the popular mind the false impression
that fire insurance is making fabulous
gone to the wall and another coni1ag.
ration such as that at San Francisco
will drive many more there. 1t must be
admitted that our rates are high, but
it is q fact as seen from the foregoing
tables hat they have not been higl
enough to make good the losses anC
general expenses of the business.
RESULTS FOR FORTY-THREE
YEARS
AS regards the expense element o.
the business we can do no more thar
touch on it, for it is an intricate sub
ject and more time and space woulC
be required to treat it satisfactorily
than we can give at this time. From
the experience of joint stock fire in
surance companies in New York STATE
from 1860 to 1910 inclusive the aver
age ratio of expenses to premiums re
ceived was 1886 per cent. The aver
age experience of joint stock fire in
surance companies of other states fol
the same period was 36.16 per cent
For the purpose of continuing the dis
cussion we assume that Sc per cent
Is fair ratio for Maine for the years
1S68-1910 inclusive, which marks the
extent of the time the State OF Maine
has maintained an insurance depart
ment. Reference to statistics and re-
ports on file in the Maine Insurance
| Department shows that fire insurance
companies of other states and coun-
tries have received in premiums from
the people of the State of Maine in
forty-three years the sum of $59,906,-
247.74. During this time they have
paid losses amounting to $35,870,4 9759
leaving an excess of premiums receiv-
ed over losses paid of $24 ,035, 750,15
Allowing an expense of SO cents foI
every dollar received In the way OF
premiums, we have chargeable to I'M
der writing expense $21, $50, 249.17; de-
SURELY RANISHES