Evening star., 1939-01-01
Earnings Of Bank,
Insurance Stocks
Above Average
Casualty Concerns Face
Continued Expansion
In 1899 Volumes
BY Cambridge Associates.

BY Cambridge Associates.
In 1888 bank stocks hesitated in
their recovery from the lows of the
great depression, but insurance
stocks resumed their upward march
after three poor years. Earnings for
both groups were better than earn
ings of the average railroad or in
dustrial stock While the bank
stocks moved more or less together,
there was a decided variation in
the performance of insurance stocks,
with the casualty companies tend
ing to take the lead.
Owing to the fact that a large
part of bank earnings under present
conditions are made up from inter-
est on Government and other high
grade bonds. the low level of gen.
eral industrial profit had only a
moderate effect Here and there a
bank reported improved earnings.
particularly in cases where it stepped
in to help finance modernization
and plant improvement programs.
With a large part of the debt
refunding program of industry COM
pleted, the banks are now looking
forward to a greater demand for
new capital, some of which will be
supplied by banks temporarily until
accumulated expenditures warrant
the Offering of new issue of securi-
ties. 1t is also possible that small
local businesses will be supplied with
long-term capital of a self-extin-
gushing nature under less stringent
examiners requirements.
Underwriting Profits Cut.
While there has been a somewhat
ominous increase in the burning rate
after several years of extraordinary
underwriting profits, there seems to
be no reason why a sharp increase
in losses should be seen at once.
Meanwhile the amount of fire in
surance outstanding continues to
grow as owners come to appreciate
the wisdom of full protection.
Casualty insurance on automobiles
is still showing a rapid increase in
volume. Buyers on he installment
plan are, Of course, protected and
every year more of them continue
to buy protection of various sorts
after installment payments have
been completed. In contrast to the
record of fire losses, automobile ac-
cidents appear to be definitely on
the wane. The effect of widely pub
licized safety campaigns and. safer
designs of the newer cars is prob
ably responsible.
Casualty Volume Increases.
Other casualty ana surety lines
are growing rapidly in volume, but
with varying profit experience, de-
pending on the care with which
plans are laid and the store of ex-
perience for actuarial calculations.
Catastrophes Of nature have seemed
more than ordinarily prevalent dur
ing the last few years, and have
been productive of great deal of
casualty business. Health insurance
and hospital insurance are daily
growing more popular. 1t is gener-
ally conceded by insurance execu-
U1FCo ClldC LII GllC Casually lilies llc
the greatest possibilities for business
expansion.
Administration of stock and bond
portfolios by fire and casualty in
surance companies in 1898 was gen.
orally successful Here and there a
dividend increase was announced;
reductions were almost absent. The
accretion to liquidating values from
increased security prices was largest
in the case of the fire companies,
which, enthusiastically, are more
heavily invested in common stocks
than the casualty companies. As a
compensating factor, however, many
casualty companies were able to re-
port much improved underwriting
earnings, practically all Of which
will be ''plowed back for the pro-
lection of policyholders and to in
crease stockholders equities.
Jamaica has had wave nf strikes