INSURANCE BUSINESS IN 1914

Dominion, Volume 8, Issue 2420, 27 March 1915, Page 20

INSURANCE BUSINESS IN 1914

J- rr- ■ ' £ ' . EFFECTS OF THE WAR ' . 10 -- • FIRE RESULTS PROGITABLE il _■■■ U '' Commenting on insurance business in 1914, Messrs. Maclean and Henderson, ' s tlio well-known brokers of Stirling state '» that while tlie war over-clouded everyS 1 thing in the last five months of the 6 year, a few good results may be ex- ') pected to accrue. One, they .declare, J 1 will bo the indirect, but powerful, promotion of insurance in. its best forms all. the world over, and another will r be the teaching or enforcement of the benefits -of saving'on, millions of peoa pie in various ways, as well as on cor- '■ porations and Governments. Tliere r were few additions to the ranks of new offices, but several of the established companies were amalgamated, and a few of the more unimportant concerns went into There have been ' rumours of further important amalgarcations, but probably these are held over till more settled times. Prices . of insurance companies' shares kept good, and touched high limits before the first half of the year, but, as often hap- . pens when the issue of the annual reports and accounts is ended, interest , in. the market-diminished, and'quotations commenced to fall; some of the chairmen at the meetings referring to " fire losses being on a larger scale. This declining tendency was, of course, ao- ® celerated after war was declared, but seems to have run its course, as the market for the better class of shares v S shownjan upward tendency. . No doubt there is considerable attrao- . tion now to investors in the handsome ' yields to be obtained from shares in J quite a number of well-established, strong companies. | , Profits on Fire Policies. In the fire department the profitable 3 results announced for 1913 seem likely j- .to be repeated. Officers have, contrary I r to expectations, 'not. been adversely _ affected by the war on the Continent, _ as they arc not liable-for the heavy • !l os^ s d , ue to w «r ( o))eratioiis. According fc to the latest reports, tho British offices doing the largest direct fire insurance . business with Germany and Austria were I the Aorth British and Mercantile, Com- - J' 1 ® 1 ' 0 " 1 . 1 Union, l'hocnix, and Yorkshire. , Ihe Fine Art and General Compauy an- . nounced that it.-had no German or Austrian investments or 110 money or securities deposited in-.Germany, Austria, or any other foreign country. Ordinary fire losses were higher, but npt abnormally • so. • 'lhe estimated losses by the important tires in the United Kingdom for the year were £4,607,097, being an increase of £924,053. So fatas these were due to the operations of militant suffragettes, m the early part of the year, that.'adverse influence came • to an end when war.was-declared, while there have been no conflagrations, of a serious nature. One'of the first effects of the war., was a demand for reinsurance by. sueh of the British companies ■as had reinsured with German or other enemy offices,, although this in many oases meant paying the premiums twice, or even more; if the business had been done at cut rates. ' Until hostilities •cease, and even after, these foreign contracts are found to be worth no more than a "scvap of paper." .AH now business of this class is now "being offered to British offices, and lias Jed to hew ones being formed. .It is said that the re-insurances by British offices on the Continent for fire business amounted to about £10,000,000 sterling, but this is probably an over-ostimate. il"'-' ' Life Business. Good. Already three of the mutual life offices have issued their reports of business for 1914,. showing encouraging increases in tho amount of policies issued. This indicates that business must have been good before the war s The first proprietary office to issue its return is the Star Assurance, which gives tho amount of new - policies for .1914 as £1,086,574 net, a satisfactory increase. . In regard to the altered position of life offices caused by the war, it is thought t'h'at the year will end! better, than many people expect, owing to --tlw satisfactory amount .of business done in the first sev>en months. The difficulty, however, will be that about a dozen companies whose valuations fall to bo made as at the end of 1914 may bo expected to. reflect the depression of Stock Exchange values. The general view is that the depression' is of a temporary na- • ture, and it is thought it would be just to postpone those valuations until business resumes a normal course.' , The matter is a-serious : one, as'the life'offices have at least 250 millions sterling invested in marketable securities, and some companies had last , year. to '.provide as much, as' £700,000 for this purpose. There are many solutions .offered - of the difficult problem of these-valua-tions, but fortunately the Board of Trade has decided that the valuation of British'life offices' securities ' may be •made on the basis of Stock Exchange prices at December 31, ' 1913, when prices were comparatively low; but securities acquired during 1914, will be taken at cost price. Arising, out of the losses of British cruisers, industrial offices have had to meet heavy death claims, which they are meeting generously even without strict legal . liability,' : and they are still mounting up. In'this connection tlie Prudential has paid out ' over £100,000. - " ' The Accident andi Employers' Liabil- ' ity companies' -are: thought to have ' had a satisfactory, year, as they are ' now working on moro, reliable statistics, ' and with bettor rates for home business. ' '.The' usual tables prepared by- the "Post ' Magaziue" in'regard to Employers' Lia- ' bility. business shows that-in-1913 the ' tariff companies earned premiums of ' £2,711,906, on which: the profit J was < 15.40 per cent., .while the non-tariff com- ' panies received £842,486, on which the < profit : was 7.02 per cent. The total J premiums, therefore,- amounted to £3,554,392.0n the year, with a profit of £478,054, being at the rate of 13.45 ? per cent. Since Employers' Liability insurance was commenced the companies •have collected-over 17-J millions sterling 1 .in premiums, which liave only yielded a profit of £240,828, or 1.37 per cent.; J in fact, it is only 'in the last two years .they have been able to show any profiti

Marine Transactions, , The past year seems likely to prova a good one for marine-insurance companies, owing to 'the ! large amount of business done and to losses being of a normal nature in the absence ol tempestuous weather last winter. In July it was calculated that the occasioned by the' more important shipping casualties during the first six" .months of the year were £2)738,500, a considerable reduction. At the, outbreak of war it was seen" that the, value of the large liners was so (Jieat tlia't the loss of-a few only of them would mean ruin to tlie underwriters, and'shipping business would nearly come to an end. In these circumstances .the Government opened the Insurance Bureau, and for.a time' as inucn as live to six guineas per cent, wafe quoted for ocean voyages. This rato gradually declined when it became apparent that the .Gorman [leofc would hot- venture battle, and-as .the German cruisers in various parts of the world were gradually "rounded up." It is.understood the Government has made a profit, of about 100 per. cent. • on the 'whole business so ,far..