MODERN INSURANCE.

READERS of "My Novel" will remember the astonished delight with which Dr. Riccabocca listens to Parson Dale's explanations of the system of Life Assurance. It was a novelty to him, as it is, in fact, roughly speaking, to all non- English peoples. Attempts made from time to time to naturalise it in France by establishing branches of London offices in Paris have, we believe, ended in failure. National habits of thrift supply, and as thrift is practised by all classes, more than supply, its place, though there are cases, as of the early death of the bread- winner, for which only assurance can provide. In England and the United States the system has been largely developed, though still, it may be said, scarcely in proportion to the national wealth. The sum annually paid in life-premiums is about twenty- two millions,* while the national income may be estimated at about thirteen hundred millions. Accepting these figures as the basis of our calculations, we might say that we devote the sixtieth part of our income to a provision for the future. From one point of view, however, things are really better than these figures would seem to show. Deducting from the total amount of life-premium income that bek ;aging to the indus- trial or working-class societies—about four millions—and from the aggregate national income that earned by the working class—four hundred and fifty millions—we arrive at these figures : an annual saving of eighteen millions out of an income of eight hundred and fifty millions, about one forty- seventh part. Probably we should find, if we could only disentangle the figures, that the upper and upper-middle classes do exercise in this way a fair amount of thrift. It could not be far from the truth if we were to reckon that these classes pay seventeen millions in life.premiums, out of a total income of five hundred and seventy millions, or something less than a thirtieth part.

One kind of assurance, largely practised by the working classes, is almost wholly wanting to the mercantile and pro- fessional,—the assurance against sickness:I- Desirable as it is in theory, it is probably found impossible in practice. The Clergy Mutual, we believe, established some such branch in its earlier days, but has found it expedient to discontinue it, as far as taking new policies is concerned. The fact is, to put the matter brutally, the opportunities of fraud, or misrepresentation not consciously fraudulent, in the professional class would be enormous. Working men have a rough-and-ready method which, if it sometimes seems harsh and even absurd, is anyhow effective. A member of a Benefit Society is not allowed, when receiving sick-pay, to put his hand to a stroke of work of any kind, not even, we have been told, to fetch a pail of water for his wife or nurse his baby. And there are plenty of neighbours to see that he does not. The consequence is, that there is very little malingering among them. The ennui, where there are no resources for the passing the time, would be intolerable. But it would be only too easy for a professional man, if he felt or feigned himself a little out of sorts, to spend a pleasant and even profitable month at home, while he drew an income from his sickness-assurance policy.

Oa the other hand, the Accident Assurance Companies, which exact some visible evidences of the justice of a claim, seem to multiply and prosper. There are twenty-one in existence, more than half of them having had their origin, it would seem, in the

• We take our Soares from a valuable periodical, The Handy Assurance Directory, 1.88748. By William Bourne. Loudon: F. W. Boerne.

t A " Health Association" and a "sickness sod Accident Office" are mentioned, but no partictilars are given.

Employers' Liability Act. Their income amounts, in round numbers, to £700,000, and the claims to less than half. "Commission and Management" take, it is true, a very large part, considerably more than half of the balance ; but a fair margin of profit remains.

Against other disastrous contingencies, considerable provision is made in this way. Four offices assure the farmer against the ravages of hail-storms, and as many more against mortality among his live-stock. As many as twenty undertake the risk of insuring plate-glass. The five that publish their financial statements do not seem to find it a very profitable business. The claims, indeed, are not more than £5,303, against a premium income of £11,261; but then, the expenses about equal the claims, and reduce the profit to a very small sum. In one case they absolutely exceed the premiums received. Finally, twelve Companies assure steam-boilers, but no particulars are given of their operations.

To return to the subject of life assurance, by far, of course, the most important branch of the business, we find "Commission and Expenses of Management" a formidable item in the accounts. The cost of conducting the eighty-six Companies of which particulars are given amounts to more than three and a half millions annually, or about one-sixth of the sum paid in premiums. It is obvious that there is a good deal of waste about this. Of course, " management " must cost something. The consideration of proposals, the examination of claims, and the management of a vast property, amounting in the aggregate to more than two hundred millions of money, cannot be carried on without a large staff of directors, secretaries, actuaries, and clerks. But a large saving might be effected if the eighty.six Companies were reduced by half. Some that have a fair right to a separate existence might be more economically carried on were they amalgamated ; while of some it may be said that they have little raison d'être beyond that of providing a number of officials with comfortable berths. As it is, a multiplication of establishments and an expensive competition for custom make in the end a very serious deduction from the savings of the people.

Bat if " management " is too costly, what is to be said of "commission "? We may give a typical instance of how it is worked. .A, being about to marry, insures his life, and asks the lawyer who is drawing his settlement to what office he skill go. The lawyer recommends one in which be happens to be interested, and receives from it a commission on the business which he brings—indeed, in some instances continues to receive it as long as the assurance is in force. The practice needs only to be stated to be condemned. It is an expense for which the insurer gets absolutely no equivalent.

The figures under the head of "Management and Commis- sion" become nothing less than startling when we look into some of their details. The variation between the re- turns of different Companies is something enormous. One company, for instance, spent in 1886 two-thirds of its pre- mium income in receiving and managing it, while the Equitable spent very little more than a twentieth part. The figures of the Industrial Societies are, indeed, from this point of view, unsatisfactory. We give them as they stand in Mr. Bourne's Directory :— Name of Company. Premium Income. napalms.

British Legal 04,154 £15,613 British Workman 153,384 74,317 London and Manchester 37,662 20,746 Pearl 195,737 111,345 Prudential 2,911,295 1,126,158 United Kingdom 44,512 29,818 Wesleyan and General 119,701 65,218

Roughly speaking, a million and a half is spent out of three millions and a half. We desire to lay no blame. It is, indeed, obvious that this kind of business must be very costly ; but one cannot help wishing that the providence of the working class were not so heavily taxed. To some extent they have the remedy in their own hands, for the Government system of assurance is available, if they will only have recourse to it.

The general question, "Are the offices solvent P" is that in which the public is chiefly interested. It is satisfactory to find Mr. Bourne assuring us on this point. "The proportion of weak offices to those that are thoroughly sound is much smaller than at any previous period in the history of life assurance,"—relative praise, to be sure, bat good as far as it goes. It is tree that the number of offices which come up to the test of possessing in accumulated funds a third part of the sum assured is not large, but there are many which approach, or are in a fair way of approaching it. Young offices cannot hope to pro- duce such favourable balance-sheets, but those which are accumulating at a fair rate show reasonable promise of producing them in due time. It does not fall within Mr.. Bourne's plan to give the " valuation returns" of all the Com- panies in any one year ; bat of those which are included in the present issue, we may give the following figures. We shall give only those that stand among the best ; our readers may find out the less satisfactory figures for themselves :—

Name of Office. A.muranoes in Force. Life Funds,

Equitable £6,027,851 £4,246,473 Law Life 7,555,453 5,316,626

Atlas 3 107,397 1,476,524

Rock 4,561,108 2,106,151 Clergy Mutual 7,698,527 3,372,317

And there are several others which present figures nearly as satisfactory, not to speak of those for which no particulars are given. We have been writing only of English Companies; but the American Associations, with their splendid totals and attractive offers, are well worth an insurer's attention.