FIRE INSURANCE SHAREHOLDERS.

New Zealand Herald, Volume XXXVIII, Issue 11716, 26 July 1901, Page 5

FIRE INSURANCE SHAREHOLDERS.

; EFFECT OF THE NEW BILL'. The attack of the Government upon the the 'Fire Insurance Companies has already had the effect of reducing by from £50,000 to £60,000 the value of the stock of the New Zealand concerns. This marked depreciation must be continued to a disastrous extent if the State Fire Insurance Bill becomes law, for the effect of that measure would be to render continually liable to peremptory and arbitrary closure the businesses which have been slowly and carefully built up, in each and every case at great risk and amid continuous difficulties. The question at once arises: Upon whom does this loss fall? Inquiries show that few of the losers are among the wealthy class which is popularly supposed to be fair game for Parliamentary attack. Insurance stock is generally held by a very large number of small holders, mostly people of small means, who chose to take th" great risks of. the fire insurance business in consideration of the average interest earned being somewhat higher than that offered by the risMess Savings Bank. The nature of the risk has been recently and vividly shown by the fact that in one single day, fire cost 45 companies doing business in Sydney an amount equal to then entire premiums for a whole year. Last year the North American insurance business showed no profit whatever. In our own iMorth Island the average results of the business in recent years fully justified the raising ot rates, foi although the four local companies steadily declared dividends, they only did so owing to their costly experience, and sedulously cautious management having won for them a specially advantageous connection, and owing to the profits made outside the colony by their oversea branches. The local companies made their profit by their management, but they exist as business enterprises owing to the absolute security they offer to insurers, a , security made by the placing upon their shareholders or a liability now obsolete in every other commercial field. "Unlimited liability" is the condition of local insurance* company shareholding This stringent responsibility, so well calculated to assure customers that every loss will be met, has been cheerfully accepted by the shareholders of the New Zealand companies. When we consider the difference between such an investment and the placing of money in the Savings Bank, or on first mortgage, it cannot bo asserted that any undue profits have been made by any shareholder in any local company. If we further recall that the North Island business, as a whole, has recently been unprofitable, and that the local companies have been exceptionally fortunate in making some profit, we begin to obtain an idea of the nature of the institutions which the Government is striking at, and of the place which has been taken in our industrial development by the numerous small shareholders, whose investments are to be dissipated by the practical confiscation of their business. . It will be news to many of our readers to know that the four local .companies have between them not less than 1800 distinct shareholders, a number representing an army of at least 5000 colonists, exclusive of a large body of employees. The share-books of the various institutions supply the following table: — " No. of Company. Shareholders. National Insurance Company (Dunedin) ... ... ... 725 New Zealand Insurance Company (Auckland) ... 511 South .British Insurance Company (Auckland) ... . ... ... ... 343 Standard Insurance Company (Dunedin) ........ .... ... 304 • Total number of shareholders... 1883 ' Some few individuals doubtless hold stock in two or possibly more companies. But this is comparatively exceptional, from the very nature of the insurance business, which is keenly competitive. Making every allowance for double-holding, over 1800 persons have invested in this business, so necessary to civilised society, so full of risk, so dependent upon incessant care and watchfulness. And who are these investors? Each ;; and all of the companies' sharebooks answer this question in a most emphatic manner, a statement which any authorised person can promptly investigate for himself. While there are a few large blocks, the holdings are generally small, and the " occupation" of the holder shows that insurance stock has been made use of to an unusual extent as a provision against future need, and an investment for those whom thrifty husbands and fathers have sought to secure against want. "Widow," " spinster," " clergyman" are prominent. The widow and the orphan, the maiden lady, and the man whose business opportunities are few, the trader, the schoolmaster, and the sea-captain, with many others of that great and honourable section of the community which forms no social class, but consists of those who through long and laborious years lay by from their current incomes a steadily .accumulated future provision for themselves and those dependent -upon them —these form the majority of insurance company shareholders, these are already the losers by the large depreciation in their property caused by this Government suggestion, these are now threatened with what in many cases will be distress and misery if the country tolerates the enactment of this amazing proposal. . There is an eager desire professed by the present Parliament, not to mention the present Administration, to provide a hospital for the drunken, to give a pension to the pennilesshowever undeserving, to • force compensation for every industrial accident— however much caused by the carelessness of the sufferei, to save the householders a shilling~"or two in fuel, to do many things of mingled charity, generosity, and whimsical sentiment. One. thing only seems to find no sympathy, and to be assured of no protectionthe conscientious effort of the thrifty and law-abiding citizen to so invest his hard-saved and honest earnings, that while he assists thereby the legitimate industrial activities by which the entire community benefits, he may at the same time make some modest provision for himself and for those dependent upon him.