The Birmingham age-herald., 1924-06-24
Unnecessary Waste

The annual report of Frank N. Julian, state commissioner of insurance, to Governor Brandon gives interesting and somewhat startling information to the people of Ala bama. For instance, for every dollar col lected by insurance companies for the pro- lection of Alabama property owners against fire last year they paid out $1.08 in pre- miums and operating expenses. Fifty-five per cent of the amount actually went toward the payment of losses resulting from fires. In other words, insVance companies in their operations last year in Alabama lost eight cents on every dollar of business they received. This is a practice that cannot be continued. Insurance companies must rem der service but they cannot do so at a loss. The state insurance department has already advised the people that it is determined to reduce the cost of operations of insurance companies as much as possible. Already it has prohibited the carrying of accounts for long periods and is enforcing an order re- quiring the balancing of accounts between companies and property owners every sixty days. If there other methods of re- ducing cost they should be made effective. Insurance companies should operate at as little expense as possible and the insurance department should force them to reduce op- erating costs wherever possible.
 But there is one sure method of reducing the cost of insurance in Alabama That is by reducing the fire hazard. As long as the fire losses in Alabama are above normal the cost of insurance in Alabama will be higher than the average. Insurance companies can not do business without profit for any long periods of time. If there were not a profit paid the business the insurance companies would not be in operation. Premiums paid must carry the fire losses plus the cost of operation. If losses can be reduced ten per cent. there can be corresponding reduction in premiums.
 Birmingham has found a way to reduce the cost of insurance to it's citizens. It is by the simple method of improving it's fire fight ing facilities and reducing the hazards with | in the city's limits. Birmingham, since the improvements were made, has been listed as first class and the cost of fire insurance on homes is now fifteen per cent. less than it was prior to January l.
 | Commissioner Julian pointed out that what Birmingham has done other cities can do. They need only to come to the realiza- tion that the establishment of adequate fire 1 fighting facilities and the adoption of ad- equate ordinances are investments that will from the beginning return dividends to those who provide the revenue.
 There has been a lack of cooperation in the enforcement of the insurance laws in some instances, according to the commits sioner, who mentioned that some solicitors had not proceeded against alleged viOlators after reports had been made to them and thattwo solicitors had failed to acknowledge receipts of the information. The department of insurance would be within it's rights and would serve the people of Alabama by bring ing to the attention of the grand juries the dereliction of the solicitors with the request that such measures be adopted as would force the performance of their duties by the solicitors.-Montgomery Journal.