WAR RISKS.

Manawatu Herald, Volume XXXVI, Issue 1291, 1 September 1914, Page 4

WAR RISKS.

THE INSURANCE RATES. FORTUNES IN THE BALANCE. Taken in the aggregate, the high rates that have been paid during the past fortnight for insurance of ships and cargoes against capture or destruction by the enemy will amount to a stupendous sum, all or which is practically clear profit to the underwriters. We have heard very little adopt captures of great hcavily-1 reiglitcd British vessels by tire .enemy, while cablegrams come to hand daily qf the sate arrival rn port of fully laden British ships Horn this and other countries. War risks paid upon therm and their cargoes, as upon air other vessels so protected by underwriters, will be'practically all profit, to the insurers—the companies doing the business. It lor example, 10 pur cent war risk has been paid upon £IO,OOO worth of cargo which reaches Homo safely, then, the underwriters or insurers will put £IOOO into their pockots, for which they have given no tangible equivalent, and yet there has been very tan exchange effected. For his war risk premium the owner of the ship or goods has purchased one of the most precious things in the world-peace of mini). His omniums paid, lid could sleep in doiihdeiich llmt. u they were captured of destroyed thd. loss would not fa!J !W« h‘“>. Of at any rate only partially fall upon him.. .}>!? wns the underwriters’ affair. The insured was relieved of all anxiety, except, of course, the vorv natural anxiety for the continuance of 1 E h,is ness without further let or hindrance mrn of destruction, ,So far us the unm,.. arc concerned, notvviihsppiding all the selfprotective measures they may take, they mav any day witness a- great sweep ot their profits into the .sea, and for the uninitiated, it may he explained 11/oy mutt charge high rates of insurance when (lm risks are so great, if only to acquire hinds lo slreiigthen (heir resources so as to meet, and meet promptly, claims that may arise out of some great damage dime to British ships_ and their cargoes by the enemy. Not until the war is over, or’tl/o enemies so crippled that they can no longer <f<* Iffischicf at. sea can llic underwriters sit down and count ineir profits. The situation is much improved today on what it was last week, but it would lie'idle to suppose that. British vessels on the high seas or on the British or Irish coasts arc immune from risk. RISKS OF THE UNDERWRITER. For the underwriters there_ is a lot or chance about his business. It is all chance, notwithstanding the operation of fixed and kpowli laws. It is a game- of cut-throat euchre for the underwriter may be euchred and the enemy take the euchre, while the insured, if he doer not gam a, point, will at any rate have his score unchanged.

The Insured acts, of course, irotn prudential motives, the underwriter knowingly takes tho risk, but fortifying' himself as much .as be can by ilie rate of premium and the fortunes of war Tho sea. routes being free of tho enemy’s hostile ships greatly minimises the risks of capture or destruction of British merchant ships, and the rates fall accordingly. How they have now fallen indicates as plainly as possible the success that has attended the British Navy, and that, of its allies in keeping the sea routes free, of the enemies’ ships. Tho following shows the fluctuation of the underwriters’ rales since just before Great Britain was proclaimed to be at war with Germany and Austria:

July 30th. —International friction becomes more acute. British ships Homewards and outwards via Suez i per cent; Homeward via Cape of Good Hope. 1 per cent; and outward via Cape of Good Hope per cent. Other steamers, double these rates. The same day tho rates hardened, the underwriters evidently foreseeing that war was practically inevitable, for the via Suez rates outward "and Homeward for British ships advanced to 1 tier cent; via the Cape, out and Home, to f. per cent; other ships via Suez, out and iioruq, to 2 per cent; via the Capo, out and Home, to 1 per coni ; and double rat.es for all vessels to and from tho Continent.

.July 31sf. —Friction grows still more acute. British ships Horne and out via Suez or Gape of Good»IIope, 1 per cent; and to and from the Continent. 8 per cent. French, German, Russian and Italianowned steamers to and from the Continent and tho United Kingdom, 4 per cent; and other ships, except Austrian, which wore not taken as risks, 2 per cent. August Ist. —War is drawing nearer and nearer, and there seems to be likelihood of Italy being involved. British ships, via (.'apt l and Suez, out and Homo, 3 percent; German and Italian, 10 per cent ; Russian and French 5 per cent; British ships to and from Continent, 5 percent; other slops. 4 per cent. (.'aloutta and Australia, French ami Russian ships. 2 per cent.; German and Italian, 4 per cent; others, 1 per cent; sailers to be regarded as to raics the same as 'steamships. August, 6th. 4 p.m.—The war has begun. Britain and Germany are in conflict. Minimum war rate, 10 per cent lor non-bollig-gorent vessels and British vessels to and from British and neutral ports. Between New South Wall's, Victoria, Tasmania, South Auslialia, and New Zealand, British vessels £ per cent, and Queensland and Wesiern .Australia 1 per cent. Tile Australasian rates suggesting that German warships ready to prey on British ships were prowling about tho far north of Australia. BRITISH GOVERNMENT TAKES A HAND. August 7,2 p.m. —North Roa patrolled by enemy. All British vessels 20 per cent outward ami homeward, and 10 per cent oast of Suez and the Gape of Good Hope. On this day it was announced that the Imperial Government, had adopted a scheme of national insurance of war risks. The scheme covered 80 per cent of the war riskon (he chips themselves I hat were registered in the books of three great associations : The .North of England Protected indemnity Association, the London Group of War llisles Association, anil the London and Liverpool War Risks Association, The oiioiukV property and goods were prohibited iproclamation, and, therefore, could not be protected under this scheme. The scheme also covered 100 per cent war risk on cargo covered against marine risks by Lloyd’s and I lie British companies, or other approved companies; but such insurance was limited to cargo on board vessels covered against war risks under tho Government scheme to the voyage for which the vessels were covered. On the Committee of National insurance, Lloyd’s and tho Bn'ish Underwriters wore represented, lending their practical and patriotic support to the scheme. The maximum rale was 6 guineas, and the minimum rate was 1 guinea. On 7th August the rate was 5 guineas. August B(b.—The rates for vessels in the V>rih Sea. North Atlantic, and round the British and Irish Coasts generally remained unchanged, indicating the loca'iiy of the danger areas. Other i-nt 's were, outward east, of Suez and (he Gape of Good Hope, 10 per cent. Queensland and Western Australia, other Australian Stares, and New Zealand, 15s or J per cent. August 11th, 2 p.m.—The war rates between New Zealand and New South Wales Victoria, Tasmania, and South Am-iralia. and vice versa are raised to 1 per cent, and between those countries and Queensland ami lies turn Australia, li per cent.

August 13th, 2 p.m.—The war risk’s jn (ho North Sea and English ( 'hairnet Inn ing increased, all lights being extingnidied and b’lovs adrift, leaving dangers unmarked ; mines being sown in British navigable waters and drifting about in the sea, the rates are still unchanged. .Between Australia and the L'nited Kingdom, l.’nitcd Slates and Canada and (lie Atlantic generally. they are If) per rent; between Australia amt South Africa,, 3 per cent. August. 14th, 11 a.in.—Thu rates were fixed at five per cent for ships trading east of Suez, also between India, the Far East, and the Pacific.

August l?t,h. —The rates were unchanged, but were firmer, due to the declaration of war against Austria and Groat Britain. August 18th.— I The rates between New Zealand. New' South Wales. Victoria, and Tasmania were still one per cent, and between those countries and Queensland and Western Australia per cent, suggesting that (hero was possible molestation to bo feared from enemy ships in the seas of Northern A u strnl ia.

August. 20th.—Duo possibly to unpublished but no doubt authentic news that the Gorman warships were bold by the British ships, and thus navigation in the North Son, or Atlantic was much freer from risk, the rate is reduced from 10 per cent to 8 per cent fop vessels to tutd from the United Kingdom. Tho Government rate also fell from five guineas to three guineas. August 21st,—More reassuring evidence of freedom of the sea I'outes from the enemy. Rate outwards au 1 Homewards reduced from 8 per cent to 5 per cent. August 22nd. —The ordinary tariff rates for Homeward cargoes have advanced 25 per cent. The clanger from floating mines sea tiered broadcast by the enemy and menacing tunignlipti in neutral •,raters is intensified. Iu tfie case 1 of h vessel touching' a mine and going down with all bands, leaving no due io her disappearance, then the loss would have to bo paid under an ordinary marine policy, excluding wgr risks.—Post.