FIRE RISKS AND FIRE BRIGADES.

Evening Post, Volume LXVII, Issue 149, 24 June 1904, Page 2

FIRE RISKS AND FIRE BRIGADES.

DISCUSSED BY THE INSURANCE INSTITUTE. A meeting of the Insurance Institute of Xew Zealand was hold lubl evening. Air. Morris Fox, President, occupying tho chair. Messrs. Sampson and Turner weiv elected as associates. The Chairman referred lo tho matter of outstanding subscript ions, and urged on members the nccoAsity of paying up regularly. Thero were, ho said, 115 members on the roll at the end of last session, aa compared with 130 at present, but'only 60 of theso latter had liandcd in their subscriptions. Bound copies of essays read before the New South Wales Institute during Iho past two years were received. A paper dealing with the question of whether Fire Insurance Companies should bo compelled lo contribute towards tho maintenance of fire- brigades was read by Mr. W. A. Parton. Mr. Parian adduced a number of arguments with tho object of showing that there is no moral liability on firo insurance companies to make direct contribution to the cost of maintaining municipal tiro brigades. Ho maintained that protection from fire, under which head brigade maintenance falls, and which every property-holder may claim as a right lrom the municipality or common authority, is a quite separate matter* from indomnit}' from losfe through fire, under which head insurance falls, and winch is a private contract between tho insurer and the insuring association. An association -undertaking to indemnify a property-owner from Joss by firo does not thereby assume tho onus previously resting on the third party (tho municipality) to protect that property owner from fire^ Thweforo, if such an association, carrying on its own private business of indemnity, is also raddled with part of tho cost of protection, that is direct taxation of insuring associations (or their clients) for | things with which they have nothing specially to do; to state the necessary logical sequence, it is directly taxing tho insurer with the cost of protecting not only his own property, but that of tho uninsured also. By forced contribution to fire protection, the insuring association will lose in two ways — it will lose by the amount of the contribution, and also by tho consequent reduction of premiums following on tho improvement in firc-pro-tcction measures, which improvement the association's own contribution Jiaa helped to create ; and both these losses, as items in tho cost of management, must como on to tho client or insurer. Besid<v» causing a reduction in premiums, tho improved protectjon would reduce tho amount of insurance, because less people would deem il necessary to insure, and insurers would not take so big a proportion of cover; so that in two ways improvidence would bo encouraged at the expense of tho insurer. Further, tho actual operations of firo brigades arc not an unmixed blessing to insurance awociations, becnuse of the enormous laws caused by water. As to whether insuring associations mako excessive profits cither by tho operation of fire brigades or in any other way, such profile if thpy existed would be corrected by competition. Rates of premium, in tho long run, adjust themselves to the extent of fire hazard, by tho ordinary laws of Mipply and demand, and of profit and loos. The- Chairman, in proposing a vole of thanks to Mr. Parton, referred lo the small attendance of men interested in the fire jnsurunco bu.sincwi, and lvgfetted that j discussion on tho paper could not bo left over until a future mooting, Spcakiug m ono interested in lifo insurance, ho explained a« a parallel cace that supposing an Act was passed to mako lifo companies contribute towards tho cost of keeping down a certain disease, they would naturally either havo to decrease bonuses or raise promitrtiw. Xho publio do not seem to realise that if expanses ait incivased premiums muH advance. Mr. Parton's arguments wcie hard to got over. Mr. A. 13. Kernot s«coondcd the motion, but considered members should luvvo liad more timo to study tho paper. Responsible (Ire insurance men had combattcd tho position taken up by Mr. Parton. In tho Australian States, he remarked, tho custom in regard to thomainteniuice of firo brigades was for the Government, tho municipality, atid tho companies each to contribute one-third, but although, this tended to mako the brigade more efficient, the levy had to bo met by increased prcmiunw. Ho thought insurance was regarded as a luxury, whereas it is an absolute necessity. Ev*ry layman talks, about tho ridiculous rates, but every ono consider* himself an insurance expert. Ho urged that companies should take a bolder stand in regard to tho matter of rates. Mr. Hall supported Mr. Parton's arguments, and wished to know how it Ma» that fire insuranre- companies wero to be specially selected to contribute- towards th© cost of the very thing they indemnify people against. Even in America ho did not think firo companies wore taxed for tlio maintenance of brigades. Mr. Parton, in replying to the voto of thanks, regretted that thero had been so littlo discussion on tho paper, for without dJAciUfiiou there .was, littlo use of the Institute existing at alljrin the present instance, there had been a minimum of criticism, but lie thanked members for t\w> reception they had given the paper. Tho Chairman announced that at the next meeting a marine paper would be .read by Cnptain Willis, and for the two following meetings Messrs. Galway nnd Chapman would prepare matter.