New-York tribune., 1922-01-28
Insurance Rate
Raises Building
Cost 6Per Cent
Profits Average AL and Go
as High as 4.249 Per
Cent, Witnesses Admit
at Lockwood Inquiry
More Competition Urged
Companies Bail Burglars
Who Steal Goods They ln-
sure, an Official 1estifies

forms IN the writing OF the various
Kinds of Insurance entering into the
building industry, declared to affect
the cost of building from TO 6 per
cent uas indicated yesterday in the
t.s.;nonv OF authorities before tho
Lockwood committee.
=. was brought out In statements bv
Albert A. whitney. associate general
manager of tho National Bureau OF
Casualty and Surety Underwriters. who
was the chief witness of the day, that
The average profits from the classes of
insurance concerned were about 42l
ser cent. In one classification, that of
~;anitor work in buildings" the gross
woft OF the insurance companies was
Shown to run high as A,249 per
cent.
Questioned by Samuel Untcrmyer
chief counsel for tire committed Mr.
Whitney admitted that certain of the
premium rates charged at the presen.
time "are decidedly excessive" and
shat they might stand a reduction OF
20 per cent. Mr.. Untermyer expressed
the opinion that a two-thirds cut
night be more to the point, but could
not get Mr.. Whitney to agree.
Results Of Days Inquiry
The general results of the days in
v.stigation, in the opinion of MIR. I'm
ternyer and others, including Wit
nesses, pointed to u need for the fol
lowing drastic reforms:
speedy reduction in the rates for
employers, public liability, casualty.
credit. automobile. plato glass and
affecting the building industry.
p-o,-;S,on for evnPryj S;on of ~o{o, he.
TIE states. including the granting to
the State Superintendent Of Insurance
Of the authority to revise rates down
ward whenever necessary.
Throerg open OF the National Bu-
reau OF Casualty and Surety Under
writer's TO the mutual com panies. on
terms of equality. a procedure which
was effected in the case of the FIRE in
kurance companies.
Hight" brought ont in Mr.. Untermyer's
when the former touched on the cas-
ual.y companies which handle burglary
insurance.
Don't those same companies furnish
bail for burglars, for tho thieves who
steal the very property they insure ~
asked Mr.. Untermyer.
II believe they do Mr.. Whitney re-
pl;ed.
''Is it not also true that certain of
The companies that insure against theft
And burglary and then give bail bonds
when the thieves and burglars arc
caught also take as security for the
bonds the stolen property concerned 2"
y don't know about that
Bail Bond Action Shown
"Wou,d you con sider that very
sthca husiness?'
Mr. Whitney at first declined to an
sver the question, and finally said that
reply would be "emba IRA sing" be-
cause Of his official connection with the
National bureau He added, however,
that information had been brought to
him that some OF the larger insurance
concerns had discontinued writing bail
bonds OF any descriptions
The opinion Of the witness as to the
decidedly excessive" rates was applied
by him to such elias sifcaticns as LA
hity on iron and steel erection, elc-
,ator construction. ianitor labor and
30 forth. However. the surprising prof
Its cited to the committee were tenn
pered to some extent by an cxplana-
ton from Mr.. Whitney that the vol
ume OF business Of this nature is COM
paratively small, and that the prof
its, although great. are counte rba!-
anced By losses in other classes of in
surance.
Some figures produced concerning
the "decidedly excessive" premiums
paid in New York during 1920 were as
follows:
Liability insurance on iron and steel
erectlon-premum $l.l0 for every $lQO
OF pay roll; actual loss 3.A cents out of
~cli
Elevator orcction--prer;um 60 cents
Tor every Sl00 of pay roll; actual loss
20 cents
The losses in 1920 on this kind Of
Insurance were only SITS out Of total
Premiums paid during the same period
Of SIG, 1886.
Janitor work on buildings-pre
q cents for every 500 OF pay roll;
actual loss 8 cents, gross profits,
lQs9 per cent.
AL Per Cent Profit
Following his admission that the
average profits on the insurance dealt
With amounted to AL per cent. and the
eYpression of his opinion that the
rates could be cut in half, Mr. Whitney
said that his bureau in September,
1920, started to make a survey with an
Intention of effecting rate reductions.
But they did not SO into effect,
10 added
Nearly year and half after the
Mryey was undertaken Mr.. inter
nyer amended.
ratements on study OF a schedule
1.-THE rates furnished him by the com
nisee. then went Oh to give an adol-
uonI explanation of why the rates
4pDe1red so excessive.
SThe sharp advance in wages after
TIE war began added considerably to
sne total premiums collected on pay
.olls," he said "No action vas taken
20 reduce rates in accordance VIII" e"e
increased wage scales
Don't you feel that that is pretty
strong argument for state supervl-
slon.' Mr. Untermyer inquired.
Yes was the reply.
The question Of auto truck lnsur-
snce, in its relation to building costs
then was taken up. One point men
Honed b. Mr.. Whitney WIS that he pc
neved the cost of pleasure automobile
insurance in New York to be exces-
slve, running as high as 20 per cent IN
some cases. However, this was not de-
'cioped. as the committee confined 1t
seii 70 lnquiring into com ercial auto
mobile rates. These were stated to be
200 on liability ard s135 on property
oamage, exclusive of fire insurance.
State Supervision Approved
lae second witness, Jesse S. Phillips,
.vsmer State Superintendent of Insur-