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Show Thursday, September 18, 1952 THE Page Seven SUN-ADVOCA- T GOVERNOR TALK J. BRACKEN LEE ON SUBJECTS VITAL TO EVERY CITIZEN AND TAXPAYER TUESDAY. SEPTEMBER 23 . . . 7:30 P.M. PRICE MUNICIPAL AUDITORIUM Everyone Welcome ...A Public Meeting! formula or have in fact suffered Casualty Underwriter Profits Average 0.7 Contrary .to general public relief, underwriting profits on five major casualty insurance lines written by member companies of the National Bureau of Casualty Underwriters averaged only 0.7 per cent of earned premiums over the period from 1941 through 1950, it was announced today by William Leslie, general manager of the National Bureau. This means, Mr. Leslie explained, that after incurred losses and' expenses the companies had left as underwriting profit an average of 70 cents out of every $100 of earned premiums on the five casualty insurance lines. He emphasized that these underwriting profits were before federal income taxes, and pointed out that after such taxes the underwriting results would 'be even less profitable. The casualty insurance lines covered were automobile liability, general liability, boiler and machinery, plate glass, and burglary and theft. 20-ye- ar For the period, ar 1936-195- age loss of $1.10 per $100 of earned premiums. For the most recent five years analyzed, 1946-5- 0, member companies suffered an underwriting loss of 3.5 per cent, or an average loss of $3.50 for every $100 of earned premiums on the five lines. Mr. Leslie ibased his statements on a National Bureau study of underwriting profits on the five casualty insurance lines written by its member companies over the period from 1951 through 0, the companies showed an underwriting profit of only 0.6 per cent on the five lines, or an average profit of 60 cents per Mr. $100 of earned premiums, Leslie stated. For the more recent period, the underwriting results for the five lines was not a profit but a loss of 1.1 per cent, or an aver ten-ye- 1914-195- ar 20-ye- ar 1850. Mr. Leslie pointed out that the cent underwriting profit figure was the average for the five lines over the period and that underwriting results varied considerably by line and by year. results By line, underwriting over the two decades showed the following average profits or loss 0.7 per ar es: -- 1.9 Automobile liability . . -- 2.0 Boiler and machinery -- 2.0 Plate glass -- 1.0 General liability 4.8 General liability 10.6 Burglary and theft By year, underwriting results for the five lines showed the following average profits or losses: 0, period, and consequently .the percentage figures do not reflect the size of actual dollar losses or profits. Since almost all underwriting losses occurred during the most recent years, a percentage loss for a more recent year more than offsets an equal percentage of profit for an earlier year, it was explained. This is because the total dollar volume of premiums on recent underwriting which loss percentages were calculated was much larger than the premium volume on which the earlier underwriting profit percentages were calculated. Any discussion of underwriting profits must, at some point, touch upon rates, Mr. Leslie said. He pointed out that when rates are proposed by the companies and then approved by the state regulatory bodies, they .are designed to be such that they will cover all the anticipated payments on claim agents commissions, salaries of personnel, rent, office equipment, stationery, taxes and other business expenses, still leaving something over for a reasonable profit. In years when the companies have made smaller profits than allowed for in the ratemaking through the ar the losses, investigation generally has revealed that claim costs had turned out to .be much higher than the original ratemaking hypothesis had anticipated, Mr, Leslie stated. The deficit comes about because (primary consideration in ratemaking is given to the companies statistical records of what has happened in the past. Statisticians know, however, that the future, which is the period the rates have to cover, may be very different from the past. Therefore, they make some attempt to estimate the future by putting in a trend factor, but even with a trend factor it is still difficult to predict the future." In the inflationary economy which we have been in ever since the beginning of World War II, first a creeping inflation and then after the Korean outbreak, a galloping inflation, it becomes especially difficult to estimate future trends accurately, Mr. Leslie said. On rates developed from the averaging of past experience, the chances are very heavily weighed against claim costs breaking even with the allowance for them in the rates, he pointed out. This has been especially true of such an important coverage as automobile insurance with a fixed unit of exposure, Mr. Leslie said. In that field, in addition to the inflation which sent up the costs of labor and repairs, there have 'been the added factors of the increasing frequency of accidents and the higher verdicts being awarded by jur- - liability Two Wellington Servicemen Roosevelt to spend a day visiting end visiting at the home of Mr. and sis- and Mrs Ned with his brother-in-la- w ter, Mr. and Mrs. Ervil Asay. Mr. Wendell Petersen went to Salt Lake City on Sunday to meet Mr. and Mrs. John Pincgar of his son and daughter-in-laMr. Spanish Fork visited over the and Mrs. Jack Peteren, and to 'beweek end at the homes of Mr. come acquainted with his new Pinegars sisters, iMrs. Sarah Van grandson, Rodney, who arrived Wagoner and (Mrs. Martha Sampi. there from their home In Klamath The Pinegaxs moved away from Falls, Oregon. They were accomyears ago, panied by WendeUs sister Mrs. Wellington twenty-on- e Marie Veatch and her two small they said. Home missionaries who spoke daughters. After spending a couin the Wellington Second ward ple of days in Salt Lake City, sacramental meeting on Sunday they all came to Wellington to evening were Mr. Hartle of the visit relatives here, in Price and Stake Genealogical Society and Ferron. Ellis Johnson of the First ward. Mr. and Mrs. Gareth Peterson Weber Wins Title of Salt Lake Ctiy were Sunday Weber county nosed out Davis visitors at the home of Gareths far the title of champion county Mrs. parents. Bishop and Cloye Utah producer of tomatoes for J. Peterson. 28,490 tons for Mr. and Mrs. Nathan Noyes of canning in 1961 White Canyon pent the week Weber to 27,400 tons for Davis. t. w. Now on Furlough Two Wellington servicemen, Edward Bitton and Dallas Herring, are currently spending thirty-day leaves with their families. Bitton, who holds the rank of corporal, has been doing radio work in the army and has been based in Alaska for the past year. His furlough will allow him to remain home throughout the remainder of this month and into the 'first week in October. He is the son of Mr. and Mrs. William E. Bitton. Herring is the son of Mr. and Mrs. Andrgw Herring and is serving in the U. S. navy. His ship, the Sitkow Bay, docked at San Francisco, California, for overhauling at the end of August, and he arrived home the first of September to spend a month visiting relatives and renewing many acquaintances. Last week Dallas and his parents and his brother, Jay, motored to UP LET US FINANCE YOUR NEW OR USED AUTOMOBILE les. Mr. Leslie said it is some times asked, Havent the companies received rate increases in response to requests on their part for relief on some such situations? The answer, he explained, is that the companies have been granted increases but since the inflation-- a r y trend continued without abatement the increases were granted, the rate increases have turned out to be inadequate. after Quick action if you see us first No Trouble No Fuss No Bother - - Appraisal and Insurance required on your auto. Loans made only on 1940 and later models . . . New Car Purchases Financed on 6 Plan. PRIVATE LOAN CREDIT COMPANY ROOMS 4-- 5, SILVAGNI BUILDING PRICE. 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