THE FUTURE OF INSURANCE.

Evening Star, Issue 3150, 25 March 1873, Page 2

THE FUTURE OF INSURANCE.

We cannot do better than call the attention of directors, managers, and stockholders to the following very able and truthful article taken from the New York Financier, an excellent authority on all matters pertaining to finance, commerce, and actuary business ;—The two great fires in Chicago and Boston have probably shown, to the general public, that insurance is of such real value as to be indispensable, and that the time for reform in it has come. Between the mistaken thrift which has led the public to drive close bargain?, and the irresolution which has induced officers of cunpanies to accept a bad bargain, on the plea that it was better than none, insurance has been nearly done fo death, and insurance capital has had provocation apparently sufficient to drive it from the field ; now these fires may he, and ought to be, the most conclusive reason why it should renew its courage and remain. That reform has been needed, and the practice of the business dangerous, have long been known to thoughtful and observing experts, although the statement would have received little attention from the public had it been made ; now these fires have made it plain. Nathaniel Hawthorne said that but for death and fire this world would surely become in: tolerable. The fire promises to do f.-r Boston what the monstrous cost of doing fias prevented hitherto —widen and straighten her crooked streets ; it maj 7 also reform the methods of building ; it must reform the methods of insurance practice. To do this will be to make it worth the vast cost, after all; otherwise the evil must continue until more great fires repeat the lesson. Low rates have directly encouraged had building and careless habits, and they must be advanced until they force such reform in these particulars as will allow lowering them. An old adage declares that the buyer must look out; in this business the seller must do the same. The public will pay the lowest rates in defiance of argument or remonstrance ; the companies must come to the point of adequately raising rates, and then rigidly maintaining them. If they are too high, let them be lowered ; if they are not, to vary them is to defy the law business and pay court to disaster, ana the

public ought to Understand that companies which will take what the} can get, cannot be reasonably expected to pay more than fifty cents, on the dollar. No business at all is better than that which is at once unprofitable and hazardous, and it is time for stockholders to sustain directors, and for diiectors to sustain officers, in charging adequate rates, in adhering to them, and in refusing bad risks altogether. Officers who do not think correctly, or who think one thing and do the contrary, are unfit for their positions ; and stockholders will be wise in searching them out speedily and retiring them. Such a thing as lowering the tariff rates in life insurance is never even asked by anybody, for it distinctly understood that this cannot bo done and will not be ; there are the rates, and whoever will not pay them must go uninsured. The same understanding ought to be reached in fire insurance, and it is equally necessary. It may be reached. Futhermoro, it must be, if the business is to be saved, and the present is the time for beginning to approach it. If the public desire low rates of insurance, they can be had by making buildings and habits such as to reduce the risks of insurance, and with them its cost. It is the soberest truth to say that underwriting m this country has come fairly and perhaps finally to the parting of the ways. Experience has read the lessen by the light of great fires; what remains is to profit by it. _