Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-21
Life Insurance Holds
Up During Depression
BY HARDEN CoLFAx.

Sales of new life insurance have held
up remarkably well, despite the bust
ness depression Of 1880, or perhaps, in
some measure, because OF 1t, according
to news reaching Government agencies
here. Some of the volume of business
undoubtedly was due to the use OF life
insurance as a means of replacing per-
sonal estates which had shrunk ma
terially as a result of the decline in
values of securities.
The stability of the business Is shown
bv the latest figures for new business.
In the first 10 months Of 1880, A COM
panies which do 81 per cent OF the
legal reserve life insurance in the
United States, sold $40 487. $780, 900 in
new paid-for business. as compared
with $40 SOS, 1877 900 in the correspond
ing period of 1929, decrease of only
IL per cent. This is the more remark
able in view Of the fact that 1929 was
the best life insurance year on record
and the period covered was the most
prosperous part of that year. The TACT
is that the relatively poor record Of &C.
tober of this year, which was ID per
cent below october, 1929, was really re-
sponsible for the aggregate falling be-
low that of last year.
Not only has life insurance done an
enviable business, but the future is very
bright since there is huge volume OF
insurance In force, about SIG, 1000, 900 900
Is conservatively invested chiefly in Cow
eminent and other high-grade bonds
and first mortgages, home office and
field management is increasingly efhcient
and policy forms are constantly showing
improvement.
The most bothersome problem the life
insurance companies face at the
moment Is the somewhat abnormal
policy loan situation brought about by
heavy borrowings on policies after the
stock market crash in the Fall OF 1929.
This has been gradually readjusting
itself and will unquestionably return to
normal as business gets back on its feet
again.
In aiding business to get back to a
prosperous basis, the insurance COM
panies are doing yoemans service
! through their placing of investment
funds. The investments of the life
companies gained $1,4l8,000,000 in the
last year. Investments now held, &C
cording to President Walton L. Croker
of the John Hancock Mutual Life In
surance Co. of Boston, are double those
held in 1928. The leading investment
of the companies still is the real estate
mortgage. This type of security COM
prises over 40 per cent of the assets OF
SO companies. These investments are
scattered through every State and total
s., LOB 100000 on city property and
I 81 $50, 900 900 on farms. The mortgage
loans, according to Mr.. Croker, will
show a gain of 81 per cent this year.
Stocks and bonds represent 37.6 per
cent of the investment portfolio of the
business totaling $6,531 100000. The
holding of public utility securities totals
81 $3.50, 000,0 900. This represents the
capital on which a huge amount of
work of construction was done and
thousands of men employed. The in
surance investments were equally useful
in the railroad field State and Federal
projects also were materially aided by
the money put by the insurance COM
panies into governmental securities.
The aggregate of policy loans is esti-
mated at $2,473 900 900. Disbursements
to policy holders and beneflciaries this
year will reach $4,000 900, according
to James Lee LOOMS, president OF the
Connecticut Mutual Life. OF this
amount 81 ,325, 000, 900 has been paid to
living policy holders as dividends, ma
tured endowments. annuitieS, disability
benefits and cash surrender values.
The fire insurance companies had
good many problems to face during the
year. Premium volume decreased due
to the general depression in business
and relative insurable values have been
lower as q result of q. the drop in con-
struction labor and material costs.
Then, too, the average rate per 500 OF
insurance has also fallen IN the last