THIRD PARTY RISKS

Evening Post, Volume CIX, Issue 119, 22 May 1930, Page 17

THIRD PARTY RISKS

BRITISH POINT OF "VIEW

Sonic observations on. the attitude of the insurance companies to the compulsory insurance of third party risks, and to the rationalisation of insurance, ■were made by Mr. A. Harrower, secretary of tlio Yorkshire Insurance Company, in an address on 'Insurance and tho Community," at York Rotary Club. Mr. Harrower said that motor insurances had not been very profitable in the past-. In 1928 the profit was under 6 per cent., and, in view of the prospective passing of the Road Traffic Bill, it was very doubtful whether even this moderate percentage would lie earned. "Insurance companies," he said, "are not anxious for the creation of a system of compulsory third-party insurance. Tho knowledge that every driver must of necessity be insured would, they consider, encourage the making of ill-founded and exaggerated claims, with an increased tendency for juries to award exorbitant damages. "There is the further danger that compulsory insurance would affect the attitude of the public towards insurance companies, and destroy the spirit of co-operation which now exists. As insurance companies must of necessity regulate their rates of prertiums in accordance with Joss experience, the effect of tho compulsory insurance, it is feared, will be to increase rates."' deferring to the suggestion which had been made in some quarters that insurance should be nationalised, Mr. Harrower said lie did not think that n-as likely to come about. "Government lifo insurance has failed; Government credit insurance has been run at a loss; in employers' liability the Government realised that the insurance companies could better deal with it; and fast, but not least, the insurance business obtained abroad is too valuable to lose."

Of the £57,000,000, the fire premium income of the British offices in. 1928 £21,000,000 was obtained in the United* States and £4,500,000 in Canada; and it was safe to say that more than twothirds of the total was obtained'abroad. Similarly, in other departments of insurance business the income obtained from abroad is very large. "Great Britain cannot afford to lose the profits that accrue from this world-wide enterprise, and I do not think we are likely to find any Chancellor of the Exchoquer supporting nationalisation, no ■matter what other members of his party may think on the subject."