Salt Lake Telegram | 1931-08-18 | Page 16 | Insurance Survey Disproves Reports

Insurance Survey Disproves Reports NEW YORK Aug 18 Present lS Present depressed de de- de pressed presed price levels for shares of 01 r leading life le fire and casualty insurance insurance ance ance companies probably have been beet I Induced at least In part by bj reports report 3 to the effect that even the strongest L insurance companies arc are suffering severely from Inadequate rate rte schedules schedules sched sched- ules in some sonic divisions of ot the business the generally lower trend of security values and larger loss los ratios ratos as a a 1 result of the prolonged depression sl says s 's the thc Standard Statistics company company com corn pany of ot New York In a it current curren bulletin bul bul- letin in lit which continues in part Our investigations disclose that thaI t these reports ho have ve little foundation I except possibly as regards regard certain Individual individual In in- in companies companie We Vc find that ii it itIs itis I. I Is true that casualty Insurance premiums premiums pre pro have ha e contracted in volume 2 largely because of reduced payroll payrolls payrolL S and Increased unemployment unemployment Other Othe r divisions of ot the casualty Insurance business however have ha shown no decrease In Income comparable comparable com COIn parable with wih other lines of business I We find nd further that there ha has 5 been no disposition at at least as far tr a as S the thc old line lne companies companie are aie concerned to indulge In unsound underwriting practices In i nn an attempt to maintain premium volume To the contrary insurance authorities advise us that thai t underwriting is more conservative 7 today loday by and large than for some som years ear past Casualty companies admittedly arc experiencing heavy losses chiefly I II as a a result of the troubles of last lasI I year ear Many of the organizations I er er arc are adequately reserved having prepared themselves for such I an eventuality as a that which ha has S arisen Therefore large surplus re reductions re- re this year are we think Im lm probable It also should Shot be borne bore ii In i S mind that substantial amounts probably probably ably will wi be salvaged on losses paid I last lat year jear which may mitigate to an ar I appreciable extent current losses loses The decline In i premium volume will wi not In our opinion make expense expense ex ox- ex- ex pense ratios ratos extravagant for 1931 1931 The cost of acquiring business that thai thatIs thaiS I. I Is commissions paid agents etc I Is Isa S a fairly constant Hem item percentage percentage- wise to Income Overhead O and ad administrative ad- ad Items of ot course increase on a relative basis basi with wih reduced premium premium pre pro Income but the overhead percentage per per- Is much less than the commission commission com corn mission percentage percenta e. e so s that the en en- en tire lire lre expense ratio rato probablY will wi no nobe not t be nearly as n seriously affected a as a S surface conditions might Indicate As A regards management of port port- folios folos It Is i lotical to believe beleve that th the e companies which list last year and avea over ave overa er r a n series of Years vears showed e ein in the handling of their 11 Investments have continued to t exercise rood Rod Judgment Judgment Judg Judg- ment in the current period perio In sum we believe that whereas the results of the various Unas lne of In Insurance In- In Insurance wi will till this year ear be b relatively ely unsatisfactory o D. perfectly natural experience in iii il such a subnormal nenod ne- ne nod they will wi not Rot be bp nearly as dis- dis as present prices prie for in individual in- in 1 Insurance shares share would in in- in J