INSURERS' PROTECTION ASSOCIATION.

Press, Volume LIII, Issue 9862, 11 March 1896, Page 2

INSURERS' PROTECTION ASSOCIATION.

The first annual meeting of the Canterbury Insurers' Protection Association was held at the Chamber of Commerce yesterday afternoon. Mr W. Recce, Chairman of the Executive, presided. There was a good attendance of members. I The election of officers resulted as under — President, Mr R. P. Lonargan; Com- ' mittee, Messrs G. Bowron, A. W. Beaven, F. Waymouth, J. A. Frostick, G. H. Wright, R. Struthers, J. Triggs and G. Anderson. The Executive in its report recorded some of the circumstances which had called tho Association into existence, first amongst them being the average clause. After tne Association had been formally constituted the "obnoxious average clause" was abolished. In the matter of insurance tariff all that the Association sought was a fair aud reasonable one, which, whilst of a paying character to the Company, should not bear injuriously upon insurers, and to have insurance placad upon a footing intelligible to the insuring public, and free from the many anomalies which existed under the former tariff. During the paßt month delegates from the Insurers' Protection Association iv the colony met in conference in Wellington to take steps to place the several Associations on a more permanent basis. Mr Robert Allan ably represented the Canterbury Association, and received the thanks ot the Executive. The President, in moving the adoption of the report, said:—l regret that my approaching departure for England has prevented my being able to devote the time I should have desired to give to the preparation of an address worthy of the occasion of our tirsb annual" raeetiug. As the report in your hands will explain the mam points in the Committee's work for tho year, I will but briefly review the position aa it occurs to mc. The history of the average clause, the relinquishing of the old tariff aud the introduction of the Melbourne tariff are matters you are all familiar with. Our hopes of obtaining reasonable rates as a result of the conference of underwriters in Melbourne being dashed to the ground, and the opinion being confirmed that, if only a close union of Insurance- Companies could be nv.«inlained, the unfortunate assured : might protest in vain, it became accessary I to look round for relief in other directions. Tho tendency of the day all over the world is for combinations, truats, and rings, These are very fine for those who happen to be in them, but it is the unfortunate outsidei who suffers, and it is very evident that this J outsider is no loDger content to remain in his helpless condition. They suggestions received by your Committee as tc

the best means of solving our dimculty were numerous,. those seeming J worthy of most consideration berng mutual insurance, municipal, insurance aud Stale insurance. Mutual insurance, in my opinion, is the simplest, being used by the large manufacturers in the United States and elsewhere with great success. A represents, tive of one of the largest manufacturing companies assured mc that his concern paid a low annual premium, and that alter paying the losses for the year a refund was made, but it must be remembered that the risks alluded to were of one class and probably well equipped to resist fire in every way. This class of insurance it would be more difficult to introduce in New Zealand, as the individual risk is, greater and more enterprise required than seems to exist at present. .Municipal insurance has on the surface much to commend it, in its apparently simple dispensation, but for a country like New Zealand, baring so many small towns and so many isolated individual risks, a scheme to bring the whole body of insurers together seems almost impracticable. It might have been arranged for a few of the large cities to join on the mutual principle, but this womd leave, the country districts out in the cold, which* of course, could noo be considered for a moment. State- insurance would seem to have much to commend it, aud it was decided on by the Conference in Wellington as best suited to our wants. I presume this kind of insurance would bo used either as a partial expedient to assist in keeping rates at a fair position, or to undertake the insurance business of the colony. I notice it is reported that the officers of the Government Life Assurance Depart--1 ment do not consider that it would be wise for the Stite to undertake Fire Insurance, > but, this opinion notwithstanding, it. is : ridiculous to suppose that tho people of New Zealand, if they so deairo it, cannot insist ' upon the State taking up the business, and thi3 thoy will undoubtedly do unless Home method is arrived at of reconciling the representatives of the two interests, i.e. those of the underwriters and the assured. The profits made by Insurance Companies in the New Zealand portion of their business have been much discussed, but the evidence 5 obtained so far (the returns not dividing tho business done here from that of other countries) is not sufficient for ma to make 1 any definite statement on the subject. I can only deduce that the New Zealand [ business is profitable from the fact that it * has been much sought after by a large number of Companies, aud that in the ? history of New Zealand Companies when the results of a comparatively bad year had i to be faced it was usually explained that 1 such results were brought about by foreigp , r business which would either be dials contiuued or -more carefully watched in - the future. Much has been made _ of tho salaries paid to some of the General Managers of leading Companies. This is very much a matter for the shareholders to decide, as a Manager may be well worth the salary he receives, or dear at anj price, accordiug to his ability. Bat it ii quite certain that insurauco would be muck more profitable, and consequently could bt ' done "for less premium, costing less tt obtain business, were there not so manj ie Companies competing for the business. Ie 54 ordinary trade, if there are too many corn Ti petitors to do a stated amount of business a, does the public usually pay a higher pric< te for its requirements in order that all thosi r " competitors, who cannot obtain sufficieu J

i business to pay expenses, may return • haudsome dividend ? No, my experience it quite the reverse. I believo that it is necessary in the interests of all concerned that the prices to be paid for insurance should be fixed and unalterable by competition. There is considerable difficulty, ev»m to experts, in arriving at a premium which will adequately cover all risk and return interest ou the capital invested (and we must not forget the Companies generally are not in existeuce for philauthropical putposes), and be fair to the assured. The fol- • losing illustration, from one of the text books on the subject, gives to a certain extent the idea upon which tariffs are based :—" I n a town of one thousand houses it happ»w that during the present year one house is accidentally burned ; this would afford very little ground for presuming that the average probability of fire in that town was Ito 1000. For it might be found that not a single house had been burned during the previous ten years, or that ten were burned during eaoh of these years. But, supposing that it were ascertained that at an average of ten years one house had beeu annually burned, the presumption that 1 to 1000 was the real ratio of -the probability of fire would be much strengthened, and if it were found to obtaiu for twenty or thirty B years altogether, it might be keld, for all B practical purposes at leaat, as indicating the E precise degree of probability. The number gj of tires, with other events, are found to w obsy certain lawß, although arising from ft B variety of apparently different causes. 1 When'the experience embraces a sufficiently B wide field it is not difficult to estimate the B sum an individual should pay to guarantee B him from risk." You will readily perceive M the difficulties Associations such as our own » labour under, and notwithstanding the I small ability we are considered to possess by * 1 that organ of the Underwriters, the Journal A of Commerce, which referred in a recent leading article to the deputation that waited upon the Premier from the Tonferehce in Wellington as "the very illtaught persons who approached the Premier," &0., it ia my firm conviction that the insured of New Zealand will know something more of insurance before they have done with it, and they have proved very apt pupils during the last twelve months. Rome was not built inn day. Tha ■ Associations are plodding away to obtain iDformation, and hope in time to be const- . dered capable of discussing .with the sellers of insurance, th« prices they are to pay. The somewhat hostile position assumed by, i the underwriters may, to a certain cxwue, ) be allowed for, as it was quite a novel i thing for the insured to claim a right to be. •• consulted in the formation of tariffs, and » latterly they have shown much more desire i to listen to such grievances as have been > laid before them. Bat this is not enough ) —the representatives of the aeuured mutt' ■ be fully recognised as in office, not from any . I mercenary motives, but to enoure fair tariff*» !.

based alone upon the past experience of fires in Now Zealand, and time enough hasuow, elapsed since the colony was founded to enable this to be done. Personally, I thiak that it ia a more simple matter to traniKs business with individuals or cotnpuiti than with the State, particularly so ia a J matter like fira insurance, where, in eMaof 1 claims arising, ao much may be done in the I spirit of compromise, whioh would ba llnj | possible with the State as underwriter;, And, therefore, lam yet in hopes that the Insurance Companies, and the Associations of the assured, may yet meet on common -■ ground, and discuaa questions of mutual idterest. I ssn see no valid reason why »• : suranco tariffs should be kept so secret; ott ; v the other hand. I thiak they Bhould haw the greatest publicity, so that the condy - . tions might be familiar to everyone, a< & especially to those about to build, w. I • might conform to the requirements of thi underwriters, and thus lessen the risk. Thiß 'Association has adopted as its watch. \ word, '* Fair rates and justice to all. With this constantly before us, our actions will ; be tempered by calm consideration, and the .. insured of Canterbury may feel very confi. - dent that their iuterests will be carefully, -= guarded. . Mr E. C. Ashby. seconded the mou H» which was earned. Two members were elected. The meeting terminated after pMSiug a t vote of thanks to the Prpsident.