FOREIGN INSURANCE COMPANIES.

New Zealand Herald, Volume XII, Issue 4408, 30 December 1875, Page 2 (Supplement)

FOREIGN INSURANCE COMPANIES.

Our readers lave, no doubt, noticed the continually increasing number of foreign insurance companies that are establishing agencies in London, and who hope to share the supposed profits that a wild imagination has credited to this centre of indemnity. The merits of these supposed associations •will be the subject of future consideration, when we are allowed to be put in possession of their real positions, which at present are— " Half revealed and half concealed but it is not even now too soon to warn insurers against the folly of trusting these gentlemen from whom we (whose business it is) have not been able to obtain any satisfactory information. Besides being free-traders, we can have no feeb'ng against foreigners who, we believe, brin£; as much business as they take; but we cannot overlook the fact that the conditions upon which they ask for business have been singularly unfortunate in the past, and are based upon conditions uniformly unsuccessful, not only to themselves, but also to English companies. We refer particularly to the fond delusion entertained by so many, that, provided a company has what we will admit an ample capital for the operations contemplated, it can extend its business by the means of agencies to an unlimited extent. Nothing, we' think can be more delusive. Thus, say £100,000 is a proper capita) for a company which, proposes to- entertain marine risks, and in virtue of which sum has a right to be considered as a safe and solvent assurer, it becomes ridiculously unsafe if it divides itself into ten by forming nine underwriting agencies, many of which must, and all of which v.lll, probably, be in a position to ruin the whole concern. A. recent case has confirmed our view. The' Neptunus failed from this cause last year, and those confiding people who effected policies with them upon which losses or claims have resulted, have had a very curious process to undergo. First, all papers and documents have had to be translated at the expense of the assured, and sent to Norway, where the head office is established, and after this expense has been incurred and the delay of twelve months endured, they have the satisfaction of receiving only 20 per cent, of the loss. That these associations should be looked agon with suspicion will not, we believe, be against their interests, should they be able to demonstrate their real position. We cannot think that anything can more discredit insurance generally than the establishment of agencies of a weak foreign company, certain to fail in its attempt to wrest lucrative business from old-established English companies, and as certain to commit commercial suicide in the attempt. 'Assurers have especial need just now to beware of insuring in companies who disguise or do not plainly state upon their prospectus the amount of their capital in pounds sterling, the number of their underwriting agencies, and the names of the gentlemen to whom the ( have entrusted the conduct of their business. It is now becoming common for foreign companies to give authority to some mercantile firm without any experience to open an agency for them in London, backed, perhaps' by a banker's guarantee for a sum that would not be sufficient to inanre the election of a single member to the corporation of Lloyds. This, supported by a Large brass plate, is thelsole security for the loses that must arise from reckless, or at all events ignorant underwriting, or raither an indiscriminate register of risks. It is too common a delusion with merchants and shipowners to think that a piece of paper with showy printing and an. undecipherable signature is necessarily a policy of insurance, and we warn them that it is their duty as well n3 their interest to asertain the position of the host of agencies are injuring to some extent the profession to which they aspire, and at the same time are entering upon a course of operation, the result of which must be disastrous to themselves. In fact, the only condition that is uncertain in the history of their career is that of time.—lievitw.