Evening star., 1931-12-29
INSURANCE UNITS
HOLDING Up WELL
Life Companies Suffer Least
and Surety Lines Are
Heaviest Losers.
BY GEORGE s. VAN sCHAICK.


Superintendent of Insurance of New York.
The insurance BUSINESS of the United
States has during the last two years
served as a considerable influence in
mitigating distress. BY and large it
has successfully withstood the stress
and strain of adverse conditions. Some
Impr ession may be gained Of the gen.
eral influence Of events during the last
few years from an examination Of the
| following.
OF all classes of business, life insur-
ance companies have perhaps suffered
| the least from present economic con-
ditions. While there has been some re-
duction in the volume of new business
and policy loans have been somewhat
| increased over those of normal periods,
these factors have caused little dis
| turbance in the life insurance field.
| The mortality rate has not been affect
: ed. The investment of life insurance
companies being of most conserva-
| tive nature have withstood the mar
ket depression remarkably well.
Fire Insurance Premiums or
The premium volume of fire insur-
ance business has been affected by the
reduction Of stocks of merchandise
throughout the country. While this
reduction in premium volume has re-
| leased funds from the unearned pre-
MUM reserves 1t has had the effect
of the smaller premium volume over
which the expenses of administration
could be spread. Economic conditions
| r1r.%I rrSSYY
| improvement in the field of acquisition
cost. While there has been some ad-
verse effect on loss ratios, 1t has not
been as serious as might have been
expected. The material reduction in
market values of common stocks and
other investments has produced O
shrinkage In surplus.
The premium volume of casualty
and surety companies has been affected
| by reduction, particularly In the field
| OF workmen's compensation insurance
where, in spite of advancing rates, the
reductions in pay rolls throughout the
country have resulted in a falling off
Of premiums. Automobile insurance
lines are producing a less favorable
loss ratio, due apparently TO the in
| crease in speed and power Of priced
cars. The premium rate adjustments
that have already been made or are in
prospect are expected to make provision
for these changes.
Surety Companies.
The fidelity and surety business has
suffered rather heavily from the effects
OF economic conditions. Bank de-
pository bonds. mortgage guarantees
and other financial guarantees have
produced drain upon the resources of
these companies. However, there will
undoubtedly be an ultimate salvage of
a considerable amount. These COM
panies, like the fire insurance COM
panies, suffered substantial reductions
In surplus, due to reduced market values
OF their security holdings, and have
| had In general lesser margin of sur
plus available.
The insurance business generally has
| performed its proper and useful func-
ton as a reservoir for funds to be made
available in times of distress Any fail
ure Of insurance companies to meet
these obligations has been In insignifi-
cant proportion to the total With
companies intent upon eliminating
waste and excessive costs in the pro-
duction of business, with the develop
ment OF keener scrutiny of under
writing practices by the companies
themselves, and with the fine co-opera-
ton existing between State supervisory
officials and company executives, there
! is reason to believe that there is much
promise for the future in the insurance
business.