FARMERS' MUTUAL FIRE INSURANCE.

Otago Witness, Issue 2666, 19 April 1905, Page 8

FARMERS' MUTUAL FIRE INSURANCE.

This method of fire insurance by the farmers, so successfully carried on in Canada (vide report for 1904, given below), has at last been established in New Zealand by the opening of the Otago Farmers' Union Mutual Fire Insurance Association, and this has been achieved in spite of the " cold water" so freely administered by the associated insurance companies. It is no doubt quite natural that these companies should have done all in their power to prevent the establishment of the mutual system in New Zealand, but 't is not natural that the farmers should allo»v themselves to be hoodwinked any longer, and continue to pay rates altogether out of comparison with the quality of their risks. Of course, now that the rates have been redxieed the position is to some extent altered, but how long will they continue? This is the point to be faced by the farmers. Had the old fates remained in existence the general body of farmers would doubtless have taken the matter up with more enthusiasm than may pessibly be the case now, but they must not lose sight of the fact that present low rates cannot possibly continue for longer than a very brief period — indeed, this much is conceded by the leading insurance men throughout the colony. It follows, therefore, that if the farmers are short-sighted enough to be gulled into a feeling of false security by the blandishments of the insurance agents and fail to adequately support their own association, the day is not far distant when they will regret exceedingly that they allowed their opportunity to slip through their fingers. It is, however, hardly conceivable that they will thus neglect on© of the chances of their lives, particularly after so hard a fight. About two years ago the companies were arproached by ihe Colonial Executive of the Farmers' Union with a view to having a rate adopted for farmers' insurances com. mensurate with their risks, but their declaration was that the rates did not pay. If they did not pay then, how mtist the matter stand now? The fact is apparent without any needless embellishments that the opening of the State Fire Office °and tho starting of the mutual associations has been the cause of the present heavy temporary drop in rates; but if the old rates did not pay it must be self-evident that the present rates cannot hold. These points should not be forgotten by the farmers, and they should really be the means of urging them to establish their mutuals at all hazards. The evidences of success in Canada are abundant and clear, and this on rates of 3s 6d to 5s per cent. ; bul New Zealand cannot expect to start on such a basis considering the initial expenses and allowing for possible losse3, but by concerted action there can be no doubt whatever that they can work up to this low rate in the course of two or three years. It must be noted— and noted emphatically — that in Canada insurances cover lightning, cyclones, and other risks besides fir», while in New Zealand it is against fire only. The risks here must therefore be infinitely superior to those of Canada. If, therefore, mutuals can be worked successfully in Canada, surely they can be worked more successfully in New Zealand. The question, of failures in Canada need not trouble New Zealand farmers, because once fairly started they need not fail. Farmers can. therefore face their insurance scheme with confidence, and need not allow themselves to be influenced one single particle by the sophistries and arguments of insurance agents and canvassers on behalf of the associated, companies. Under the company system immense buildings are ; erected, large salaries are paid, and excellent dividejids and bonuses are given to shareholders'. Under the mutual system the J farmers can have all these moneys divided amongst themselves. Surely this is consideration sufficient for | Jhe jittlfi. jiskjm4er jhg jOfil&JXSd

tern, and this consideration will certainly accrue if the farmers really realise the position correctly and support their own institution. Note carefully the following extracts from the Canadian report for 1904-, and with these, this article will conclude in the meantime: — The amount of policies in force on the 31st December, 190*, was £33,413,611, income from all sources amountin°- to £90,000. Fire and lighting claims paid totalled £53,172. The total expenses of management, including reinsurance, were ..£27,495, "leaving a. surplus of £9333 after "paying all claims and expenses. The premium income was 4s 7£d per £100 of risk, and income from other sources amounted to 9d per~£loo, or a total income of 5s 42d4 2 d per £100. The losses (fire and lightning claims) amounted to 3s 2d per £100, being in the proportion of 2s for fire losses and Is 2d for lightning loss's. The expenses of management and reinsurance were Is 7-Jd per £100. — [Communicated.]