The Timaru Herald SATURDAY, FEBRUARY 15, 1908. INSURANCE RATES.

Timaru Herald, Volume XIIC, Issue 13520, 15 February 1908, Page 4

The Timaru Herald SATURDAY, FEBRUARY 15, 1908. INSURANCE RATES.

At the first, glance there is something iu- , congruous between the assertion made by the Dunedin manager of the New Zealand Fire Insurance Company that rates must necessarily go up, and the declaration, at the annual meeting of the company held in Auckland on Wednesday, of a ■ dividend amounting to 10 per cent, for the year. The insuring public will naturally be inclined to say that a company whieh is in a position to declare a dividend ' of 10 per cent, has no need to talk about, the urgent necessity of raising rates. The Dunedin manager, however, was only repeating what was said at the annual meeting by the chairman of the company, when he declared that an increa.se in the rates had been rendered imperative by the unprofitable character of h'Jre insurance business in New Zealand during the bust few yea is, and by the additional expense thrown upon the companies by the Fire Brigades Act of hist session. In regard to the former point, the public have to rely almost entirely upon the word of the companies themselves when they assert that of recent years underwriting in New ' Zealand has been a losing game.. Critics ■ of the companies, of course, point triumphantly to this week's 10 per cent, dividend as proof that the managers are, to put it bluntly, implicated in a, conspiracy of falsehood to hoodwink the public. They omit to mention, however, that this par- ' ticular company which was able to show this result operates far beyond the bounds of New 'Zealand, and that it is quite possible for it to come out with a profit on itra total busuiness even though the New Zealand branch may have been conducted at a loss. They also forget that tliis isame company transacts other insuri ance business besides that of its fire department, and that a good year in the accident branch may pull through a bad one in fire. A knowledge of these facts i will help the public to understand how, in the face of a 10 per cent, dividend. the managers of an extensive company trading oittiside New Zealand as well as in it, can complain of the unremunerative rates prevailing in the Dominion. If the rates are not unremunerative, then practically every insurance manager in this couhtiy muet be an Ananias. However, even if the statements of the private companies are open to suspicion its coming from interested persons, there is evidence from comparatively hostile quarters to support them. We quoted, the other day from the last annual report of the State Fire Depaitinent to show that tlie present rates are unsatisfactory even to the Government Department, to which dividends are -not an object. A similar admission was mad* by the Attorney-General last Oetobn- when he was piloting the Fire Brigades Bill through the Legislative Council. Ti;e Hon. Mr George hail complained that fire insuiaiice companies had had a very bad'; time. " I believe that ifi so to some extent." said Dr Find'lay, " buo the losses of profit that have fallen on the insurance companies of this Dominion have largely arisen because of the attitude the companies have taken up towards the State Fire Insurance Department.'' In other words. the private companies had attempted to run- the State Department off by cutting rates to an unremunerative level. The Attorney-General, however, did not piopose to make this unsuccessful attempt an excuse for permanently keeping rates at a non-payable point. " The State Fire Insurance Departmemy'.he said, " will not set itself to prevent the insurance companies making o fair and reasonable profit by their operations. . . . If on a fair consideration of the burdens cast by this Act (the Fire Brigades Act), the rates must be increased, they will be increased, both by the insurance companies and the State Fire Insurance Department." Even In-fore that. Act was passed, tlw Government had the assurance of its own manager that the; rates were inadequate, go that if the Attorney-General was sincere in what he told the Legislative Council, the Government can scarcely stand in the way if the companies now ask for an increase, seeing that the already inadequate rates are reduced by the contiibulions levied upon them in fire board districts for the maintenance of fire brigades. Naturally nobody is anxious to see a rise in rates if it can be avoided, but the public have to face the facts we have given above. We believe, however, that insurers could

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