The Birmingham age-herald., 1914-08-13
UNDERWRITERS GIVE
 REASONS FOR RAISE IN INSURANCE RATES
Claim Losses Exceeded Pre- miums 25 Per Cent in the Past Several
 Years

For every dollar received in prem iums. s125 has been paid out in fire losses by fire insurance companies op- erating in the Birmingham district in the past several years, according to a letter addressed by J. S. Raine. secre- tary of the Southeastern Underwriters association, to President George Ward of the city commission under date of August 8, 1914.
 This is the letter the whole con tents of which were withheld from the newspapers when it was received by MT. Ward. The only part of the letter paragraphs. beginning: These are the reasons
 In the letter it is stated that the fire loss in Birmingham is the largest in the country, and in spite of co-opera- tion of the city government with the in- surance men in improving conditions, the fire loss appears to be increasing. This Is the first time the reasons of the underwriters association have been given out for the 15 per cent increase in fire insurance rates which was made several weeks ago. The letter follows.
 Letter to Ward
 Hon. George B. Ward, President Board
 of Commissioners, Birmingham, Ala.
 Dear Sir: Your several communica- tions addressed to President Low of the Southeastern Underwriters association have been carefully considered by the executive committee of, the association, who have prepared the following re- ply, which they have instructed me to forward to you.
 The extraordinary fire waste for a number of years past in Birmingham has been most alarming, which you un- doubtedly appreciate, and which has given the insurance companies great concern. The record of the companies and the annual reports of the chief of your fire department, together with sta l. tistics compiled by the national board of fire underwriters, demonstrate this beyond question.
 " For a number of years the losses per capita in Birmingham have been greater than that of almost any city of its size in this country which has not suffered from conflagration. The re- suits of the fire insurance companies operating in your city show that over q series of years they have paid out in losses and expenses approximately $1.25 for every $1 received in premiums This is not only caused by large in- dividual fires, but in great measure due to the fact that the number of fires which occur annually in Birmingham are greater than any other city of sim liar size in this section. and even this year, according to your chiefs record you have had within the first four months 1900 alarms for fires, incipient and serious, being an average of ap- |proximately 10 runs per day, which is almost without precedent. The fire waste in your city has been so great that it has seriously affected the loss record of the entire state of Alabama which has steadily risen until the busi- ness for the past five years has pro duced little, if any. profit to the insur- ance companies from the state as a whole. We assume that you are already familiar with those conditions through the correspondence and many confer ences had with representatives of in- surance companies.
 Claim Action Was Conservative
 ".Under these circumstances the com. panies would be amply justified in calling for much greater advance than Is per cent, which is by no means sufficient tc overcome the extremely heavy loss ratio of the companies operating in Birming- ham. In, however, applying only 15 pei cen tthe companies have exhibited great conservatism, and hope that by theil
 
 operation Of the city authorities and the citizens of Birmingham in their efforts to ascertain the causes which have pro- duced these annual losses, and to apply ] the remedy It cannot be expected thai insurance companies will continue to dc business indefinitely in Birmingham at z | loss and a number of companies hav' informed us that they were seriously con- sidering withdrawing entirely from youl | city unless an increase in rates was eff I fected. as under conditions which hay, | prevailed for many years and which still exist they feel 1t is altogether impossibll l to realize any profit from their business | at that point
 .'The situation is not new. The fir, l insurance companies have upon variou occasions and for many years freely con 1 ferred with the representatives of you city looking toward an improvement i1 l the situation, and while we have ha, | your cooperation as far as you were abl l to extend it, our hopee and expectation of an improvement have not been real ized. as our united efforts have not sue
 ceeded in reducing the loss record. but
 on the contrary. it appears to have grow steadily worse
 These are the reasons why the com panies have insisted upon an advanc in rates at Birmingham, and we .egre that we cannot meet your request An
 suspend this advance, even temporarily
 nor do. we feel that anything would b accomplished through an immediate cor
 ference. as the facts as stated in thi
 letter are correct and could not b
 changed through any conference at th time. nor would nuch couforonca ava