INSURANCE AGAINST FIRE.

New Zealand Herald, Volume LXVII, Issue 20514, 15 March 1930, Page 9

INSURANCE AGAINST FIRE.

SOUND BRITISH POLICY,; THE SPREADING OF RISKS; Reviewing the operations of fire underwriters in 1929 the City editor of the Times remarked recently that much of the year's experience was distinctly less favourable than in 1928. Claims in Great Britain and Ireland were considerably higher and tho loss by fire in North America, which is always great, was ajso heavier. The figures of the National Board of Fire Underwriters showed that the fire losses in the United Slates last year amounted to the vast total of £84.443,000.

The results in Britain and in North America affect tho accounts of the British companies largely, but as there is hardly any country in which the British offices do not transact business in one way or another, lighter losses in some quarters might help to balance the less favourable experience in others. This wide spreading of the visits, by • contributing to stability, is to the advantage of the assured as well as being of boneiit to the shareholders, for it would be an extraordinarily bad year in which there were no redeeming features. Much experience below the average, such as was encountered last year, serves incidentally to demonstrate the soundness of the financial policy which the big offices have long pursued. If at any time within the last 200 years they had divided all their earnings among their shareholders they would now be able neither to offer the security which the big v.alues now common in commerce demand nor to offer to the proprietors the prospect of a continuance of fair dividends. By long steadily setting aside considerable proportions of their earnings to reserves they can offer the assured ample security, and they can employ in due course the interest on the funds in the payment of dividends. These distributions, represent in many cases high percentages on the original capital subscribed many years ago, but only a very moderate rate on the capital and the reserves together, and a meagre rate at market prices. Their financial strength has assisted them to faco very keen competition in recent years, and to refrain, if necessary, from accepting business 011 terms which they believe, on the strength of their refirds, to be inadequate. They know that, sooner or later, every one whose business is well managed will appreciate the necessity of real security, and will realise that anything else, whatever the rate of premium, is not worth having.