Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-03
INSURANCE FIRMS
SEE BETTER TIMES
Prospects for Latter Half of
Year Ere Declared Much
Brighter.
BY ROLLIN Nj. CLARK.

! With the first half of 1881 now his
tory, the insurance business finds itself
in far more encouraging situation to-
DAY than it did at the beginning Of the
year. Prospects for the second six
months of 1881 are considerably i'm
proved, particularly in the investment
side of the business.
Two recent developments, both en-
/ tlrely eXtraneouS to insurance itself,
! have renewed optimism on the part OF
| company executives. First came the
! application CT the rail carriers for a Is
| per cent increase in freight rates to
/ cheer companies whose investment
portfolios contain large holdings of
railroad securities. Then followed the
on separations and war debts, with the
/ ensuing rise N stock market values.
Rail Holdings Large.
More than $4,000, 100000 Of life in
| surance reserves are invested in rail-
: road securities and fire and casualty
companies also have large rail holdings
| 1t is obvious that insurance as a whole
VIII lend fun support to the rail car
rlers In their plea for increased revenue.
! The recent stock market recovery has
been distinctly heartening to fire and
casualty companies, which are large
/ holders of sound stocks. 1t has added
millions OF dollars TO the valuation of
their securities most opportunely on the
eve of the filing of Semi-annual state
nlsnts
One illustration of the Importance of
this appreciation in assets is the Treas
ury Departments list of approved
surety companies which may write
| bonds running to the Federal Govern
ment. This list compiled semi-annually
as Of December 81 and June 80, limit,
the risk that a company may assume
under single bond to 10 per cent of
its capital and surplus. Some of the
States have adopted the Federal stand
ard and will not permit bonding COM
panies to exceed the 10 per cent limit
on any bokdS written within their
jurisdiction. Pennsylvania is the most
recent State to enact such law, Gov.
Pinchot having signed the measure just
a few days ago.
Underwriting improvement is eX-
pected to lag somewhat behind general
business recovery, but many insurance
! executives believe that the end Of the
! depression is in sight and are laying
! plans to obtain a greater premium
| volume when available.
Other Factors.
! In the meantime a number of other
/ factors seem to be working to the adj
vantage of the insurers. State officials
| have recognized the crisis existing in
| the worknens compensation field, so
| higher rates may not be opposed from
| that quarter. Several States are taking
! the offensive against rate cutting and
| rebating. and if their efforts are as
successful as their seriousness indicates
! the majority of the companies which
| have not engaged in these practices will
/ stand to profit by their refusal to dis
/ criminate between insureds.
| Recent economics effected by the in
/ surers are likely to prove their real
i worth as premium volume picks up.
| The companies which were prepared for
| the slump and put their houses in order
at the outset should reap their harvest
| in the months 20 come.
| (Copyright. 193D.