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Dr. Russell's Report.

The First Fault.

Another Calamity.

The Last and Fatal Disaster.

Raising the Lost Cable.



THE BISKS OF INSURANCE. When the occurrence of fires is carefully tabulated, it is found that, although in each case accidental, the accidents bear a constant relation to the number of dwelling-heuses, manufactories, trading establish- ments, and public buildings standing in the locality in which they occur. Tluire is a general result which enables the actuary to calculate the average risk in* ourred by each householder, and upon that calculation the amount to be paid for a policy of insurance is based, which amount is generally demanded by the existing companies. Many of the new companies now struggling so hard to obtain a position are willing to accept a smaller sum, but of course the security they offer is of very little value and those who take their policies incur the danger of not getting the cash should their policy become a claim. And for this there are many power- ful reasons, one of which lies in the fact, that unless a company can speedily obtain a very large business it incurs the danger that by far the larger proportion of the calculated fires will happen within its area of insurance, and thus that it will have to meet a number of claims, the aggregate amount of which will far ex- ceed its resources. To maka themselves safer such companies should charge the highest instead of the lowest premium; and it is certain that so far as the insuring portion of the public is concerned, its only se- curity when paying a low premium will be found in holding the policy of a company that has a world-wide business, and which insures iihe certainty @f its calcu- lations from the vastness of the area over which its uncertainties are distributed. But even the best and most powerful companies are subject to disappointment, of which fact we have a practical illustration in the report of the Royal for the past year, from which we learn that loss instead of gain has resulted from the year's transactions. The directors very properly call attention to the fact that the fire returns for the year 1864 were disastrous for nearly all the companies—tha number of fires being far above the average. But this painful result, as they observe, furnishes a very apt illustration of the fact that the result of a fire business must not be re- garded by the events of a single year, which is still farther proved by this --that in the previous year the shareholders received the largest percentage of profit they had obtained from that branch of the busi. ness. Keeping that fact in mind, we endorse the view taken by Mr. Dove, the manager, which is, that in the end the very large increase in the number of fires will not affect the average of ten years, and, consequently, that there is no cause for alarm, and no need for rais- ing the rates. There is, however, so far as its insurers are concerned, great cause for thankfulness that the Royal is not only capable of meeting such enormous claims, but also, through the interest received upon reserved funds, of still closing the year with a fire pro- fit. It should, however, be added to this statement of loss that, as regards expansion, the operations of the year have been, in point of fact, more than usually successful. The premium received in the year 1863 was £341,668; the premium of 1864 amounted to £ 406,404; showing an increase of £64,736, the largest advance the company has made in any single year since its establishment. And there is every reason for believing that the rate of increase will be rapidly accelerated. Englishmen, and indeed all men who are engaged in trading operations, very naturally place confidence in those persons and companies that are faithful to their engagements during periods of diffi- culty, so that the failure of the year 1864 is very likely to operate in favour ef largely increasing the dividends of 1866, for it is now generally understood, and as we believe correctly, that none of our large companies are more prompt or liberal than the Royal in their settlements. Turning from the Fire to the Life branch, we enter a region of prosperity and abundance, where, too, judging from experience, it appears highly probable that the future will be still more fruitful than the past. During the year 1864 this company issued 2,048 life policies for sums which in the aggregate exceed one million and fourteen thousand pounds sterling. It appears that in the year 1854 the Life premium income was £25,000, whereas in 1864 it amounted to .£150,000, which, as exhibiting a rate of progress, we believe to be unexampled. Evidently the public appreciates the security it offers, and that appreciation is sure to increase; the result of which will be that the amount of business transacted will soon be doubled, and the profit, with the security, thereby largeJy increased; for seeing that this company has its agents all over the world, with boards of directors in London, Edin- burgh, New York, and in other large cities, its ex- penses would be but slightly increased by the enlarge- ment of its.business. And we should rejoiee to witness such a result, for in that case the insurance system would be equally extended side by side with perfect security to those who take up policies. It is only in that light that the subject interests us. Our great aim in this matter is to induce the public to adopt the system, and in this our suc- cess would have been more marked were it not for the questionable proceedings of many companies. In the candour of the present report we see fresh cause for confidence. There are boards of directors that would have cooked the fire accounts, in order to hide from their shareholders and the public the real fact re- lating to the past year's transactions. The directors of this company, rising superior to such courses, at once state the truth, and, as the almost necessary con- sequence, they will be raised in public esteem, and will gain, as they ought to gain, the unbounded confidence of their policyholders and shareholders. ———————