ACCIDENT INSURANCE.

Timaru Herald, Volume LXXVI, Issue 11659, 18 January 1902, Page 4

ACCIDENT INSURANCE.

, CRITICISMS BY AN EXPERT. THE GOVERNMENT DEPARTMENT'S REPLY. The following articles appeared in successive issues of the '' New Zealand Times'" : (Mr R. J. Paul, general manager of the Ocean Accident Corporation, is at present on a visit of inspection to the branches I 1 of that institution in this colony. In conversation with a "Times" reporter yesterday, Mr Paul said that accident insurance had been, cut down so fine since th«

coming into force of the new Employers' Liability Act in England that the whole of the insurance companies -were being carried on at a loss. He prophesied that it would be found that the same result would accrue in New Zealand where business was being done at English rates. He says itis impossible to make accident insurance pay either in England or in this olony on* the existing scale, and if the Ocerr Company had to depend on accident business alone, iF would soon have to close up. At present the company is simply carrying on here and making a connection in. the hope of some rational scale of rates coming into force in the "beautiful days to come." Mr Paul has not been long in the colony, but he finds on every hand striking testimony of the apprehension with which the incursion of the New Zealand Government Life Insurance Department into the arena of accident insurance is regarded by some of the largest insurers with the Department. In fact, Mr Paul has it on first-hand authority that so chary are some of the Government Department's clients —who have a knowledge of the trend of insurance matters—that they are foregoing prospective benefits and relinquishing their Government-life policies in order to insure with companies whose operations are not complicated with accident insurance operations, and who, is is believed, can give their clients larger benefits than any department or society so hampered can aiford to do. Mr Paul relates that accident insurance has proved absolutely disastrous to. several companies in England already, and that a number of life insurance institutions which were induced to go into the accident business have now pulled cut with their, fingers burnt. It appears that so confident are outside life insurance firms that the New Zealand Government will, by entering upon accident insurance, prejudice a carefully built up life business, tnat quite recently an outside firm set up in business in this colony, and another contemplates doing so in the near future. Mr Paul remarks, •' inter alia," that the English Board of Trade returns are quite unreliable in regard to the quantity of accident insurance done in the Old Country by reason of the fact that it is not compulsory under the English Act for employers to report accidents to workmen, and it is by no means a general practice for them to do so. Mr J. H. Rishardson, Commissioner of the Government Insurance Department, ■n-rites : —l have read with suiprise in Saturday morning's " Times " the report of an interview with Mr Paul, the general manager of the Ocean Accident Insurance Corporation. I have no comments to make regarding Mr Paul's remarks respecting the cutting of rates, beyond saying this department will not take part in any " cutthroat" competition. We have fixed our rates on, what we believe to be a fair and safe basis. If experience shows that the rates can be reduced we shall reduce them, quite regardless of what may be the policy -of Mr Paul or the other private insurance associations. Similarly, if we have reason to think that they are too low, we shall not hesitate to increase them. At present, so far from apprehending any financial trouble in connection with . the new branch, we haTe every reason to hope that we shall shortlv be able to make a material reduction of premium im a considerable number of occupations. The benefits which the people of New Zealand have derived from the existence of the Government office is shown by a comparison of the rates ruling in this colony with those in South Australia, where the business is solely in the hands of private offices. In South Australia the workers' compensation rates are in many lines double those ruling in New Zealand, whilst as the benefits under the South Australian Act are considerably smaller than under the law of this country" the rates there should, as a matter of fact, be the lower of the two. As I have said, we shall not pursue a. policy of "cut-throat" competition in the accident business in view of the fact that our existence serves as an insuperable bar to the exploiting of the employers of the.colony in the interests of shareholders' dividends. It is, however, to Mr Paul's innuendoes regarding the life branch of the department that I take the warmest exception. The gist of Mr Paul's argument is that the assumption of accident business will involve the department in financial loss, and that such loss will affect the insurance policyholders. Nothing is further from- the fact, and any person putting forward such an argument is either, profoundly ignorant of the position or is foolishly relying upon, the want of knowledge |of his hearers. In the first place, as I have already indicated, there is not the smallest reason to anticipate monetary loss in connection with the rates we are charging, and I am sorry to learn from what Mr Paul says that his own corporation is going backward in this respect. In the second place, if any such loss did arise, the law provides for the amount to be made good bv Parliament, not one solitary farthing "of liability attaching to the life* branch in respect of the accident funds. If Mr Paul, before making his pronouncements, had read the Act establishing the accident branch, Jie would have seen how completely the'iffe branch is protected from any" shadow of liability for the accident branch, either for policy contracts or expenses of management. -Mr Paul is a visitor to the colony, and perhaps has not had leisure to go into these matters. He has, however, been badly advised, and before making an unprovoked attack upon our flourishing life branch, which, be it noted, in no respect competes with his corporation, and should be safe from his anger, he should surely have satisfied himself that he properly usderstood the subject regarding which, he was speaking.