NO WAR RISK PROTECTION NOW

Taranaki Central Press, Volume IV, Issue 360, 15 February 1937, Page 3

NO WAR RISK PROTECTION NOW

EFFECT OF DECISION OF LLOYD’S UNDERWRITERS.

GENERAL REVIEW OF LONDON INSURANCE BUSINESS

Tiie decision o£ Lloyd's underwriters not to accept any war risks, on goods or property, has given rise to speculation regarding the Government attitude. The decision became effective on January 1, and refers to the risks of war in Great Britain as well as on the Continent. Only in the United States and Canada will risks be accepted. It is the plain duty of a Governnfent to accept war risks in time of vCar —the British Government did so in the Great War. But the business community meantime finds itself

without any means of protection against the losies which might be incurred by hostilities. There is therefore a considerable body of opinion whidh is urging the desirability of the Government’s accepting war risks immediately. I gather that influential forces are already at work, says Mr J- H. Wood, F.R.Econ.S.

The situation is by no means simple. It is contrary to tradition for the Government to het in a commercial capacity save under very special conditions. Nor, on the other hand, is there any case for attempting to impose upon the Government (that is, upon the nation) burdens Which are expertly considered to be unprofitable. Except in the actual event ot war, when the vhole nation is implicated, it is difficult to see with what justification the special risks of certain members of the community could be shouldered by the community in general.

Record Life Assurances in 1936. After the usual end-year "spurt” many insurance companies have published figures of new life assurances last year. In practically every case large increases have been registered, and so far only one company, the London Lite, has returned a decline —a very moderate one. The results? of the Prudential naturally overshadowed the others. This company’s new life assurances amounted to the huge total of £’29,300,000, against £27,800.000 last year. Other notable increases were registered by the Royal London Mutual, Where £6,313,628 last year compared with £5,510,060 in 1935. In the case of the Phoenix, the improvement was of more than £1,000,000,

the actual figure being £4,850,000. One of the most striking improvements was registered by Mutual Property Life, whose new life assurances jumped from £590,000 to £855,903. Few societies can boast as long a history as the Equitable Life Assure ance. and the improvement here from £1,335,000 to £1,700,000 must be accounted very creditable. This company has been operating for 174 years; two other offices celebrate this year their centenary, the Legal and General Assurance, which registered an improvement of £i890,000, and the Liverpool and London and Globe, vJhich disclosed one of £740,000.

From these figures' the close intimacy between life assurance and general industrial conditions may be gauged. The f ortlicoming accounts are eagerly awaited, for they will cover a period during which industrial revival reached its highest points since the depression. New records are expected.

The Marine Position.

The year 1937 commences rather glumly for marine underwriters. The returns of the Liverpool Underwriters’ Association show that the unfortunate trend of shipping casualties continued in November. In November last year there were 15 total losses and 661 partial losses, against 12 and 514, respectively, in 1935; the corresponding figures for 1934 were eight and 480. December was also a bad month, though figures are not available at the time of writing.

There are influences operating two ways on the revenues of underwriters. On the other hand, more shipping is in commission, so that premium income fa rising; on the other, bad fortune has resulted in the payment of more claims, while the rising cost of repairs l has meant a greater proportionate expense in meeting claims. It is clearly high time that premium rates Were brought nearer to their level of a few years ago. Coronation Insurances. There was a certain amount of confusion regarding the exact posi-

lion of certain insurers against Coronation troubles. Most of the insurances covered the risk of the postponement of the Coronation and were of substantial amounts. No liability attaches here now that the Coronation is to be held at the appointed time. Where, however, the Coronation of Edward VIII. is specified there is a clear liability. There was also the matter of the definite article to be cleared up. Some policies covered the risk of postponement of “the” Coronation, which in some quarters was held to imply the Coronation of Edward JVTII. Certain other insurances did not specify either postponement or person, but provided indemnity against any actual loss involved. Of these there were two types, the one assured on agreed sum for loss, while others covered only a loss to be ascertained.

Fire Losses.

Although the authorities put the loss resulting from the Crystal Palace fire at £1,000,000, the actual loss to underwriters and insurance companies was, no more than £210,000. This figure “The Times” brought into its computation of fire losses in November. A total for the month of £878,000 was given, which compared with £962,000 in October, and £536,000 in November, 1935. The 11month loss, at £9,088,000, shouted an increase of nearly £500,000 on the corresponding period of 1935. The last figures for fire losses in the United States covered the 10 months and shpwed a trend remarkably similar to the British experience. The total loss is put at 240,415,120 doh lars, an increase of 30,096,047 dollars on the year. In connection with the American position it has to be remembered that a given amount of premium income in 1936 represents a greater liability than in preceding years, for in 1935 the favourable experience of the companies enabled an all-round reduction in rates. The latest figures showed that the adjustment was, perhaps, rather hasty.