INSURANCE & WAR

Dominion, Volume 9, Issue 2724, 20 March 1916, Page 6

INSURANCE & WAR

HOW BRITISH OFFICES HAVE . STOOD THE STRAIN.

"After seventeen months of war no weak spot has obtruded itself among British insurance offices, in' spite of the difficulties they have had to contend with and the losssb oaused by the war in extra mortality." This statement is extracted from the annual review' of insurance business and shares published by Messrs. Maclean and Henderson, of Stirling. Of course the full effect of the wax has not yet been felt, and will not be apparent for some time. There will be indirect influences to contend with, as Messrs. Maclean and Henderson remark, but, gonorally speaking, what is to be encountrered will be the direct losses in Continental lands, the actual iscene of warfare, and the loss of reinsurance business in many countries. Against the loss of fire and marine, etc., business in the enemy countries, there is some offset in the loss of. confidence in Austrian and German offices, whioh is bringing in business all over the world to the British offices, attracted by the integrity and the enormous finanoial strength of the latter.

British insurance offices have had their premium incomes reducedin. many, t cases by the cutting off of business with.' Germany and Austria. The adverse effect of the war was felt in almost every part of the world, in addition to Austria and Germany, and it caused both loss of premium income and forced liquidation of liabilities, in the case of the North British and Mercantile the reduction amounting to £331,286. The London and Midland, whioh had a large besiness connection with German companies had after the war: to cancel these and refund the premiums, involving a loss of £60,803. Continuing their review, Messrs. Maclean and Henderson: write: —From Ma> onwards there was a continual decline in the prices of insurance companies' shares -to the au« tumn months, when the tendency has; been somewhat firmer. The decline wai ascribed to the liquidation of deceased accounts and a desire to provide funds to subscribe to the war loans. Therais no doubt the low prices are . not justified in many cases, and that the depreciation must be regarded as temporary and artificial in so far as it is entirely due to the war and not to any material change for the worse associated with the trading of the companies: Thfl confidence felt in the. leading offices is also shown, however, by the fact thai the decline in their shares has been less than in those of many trading concerns. This has resulted largely froin tbe strong financial position of the insurance offices which have been accumulating large reserves during many years •of prosperous trading. Generally speaking, fire and accident business is still good, while in the marine department the results are very favourable. On' the other hand, the depreciation in assets is a serious matter, but fire, accident, and marine companies do nof carry tho largo of Stock Ex« -change investments incidental to lif« assurance operations, and consequent!) - . arc not so seriously affected thcrebv. The dividends usually paid absorb only a small part of tho profits available, and oven if trading profits decline little difficulty should be experienced in main-, taining the usual distributions out o!, interest receipts. In all probability there lias not beon_ in the lifetime ol tho. present generation such opportune ties of making favourable investments in insurance ramp.inios' slipms as- art now presented.—"Financial Times."