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Rh work, handling at times as much as 30,000 tons a month. From Feb. 1917 to Jan. 1918 the I.W.T. service was responsible for the discharge of ocean steamers to quay or to barge at Basra. All commodities required by the force in the field were carried, the largest quantities consisting of grain, forage and fuel; in addition there was a large traffic personnel and many animals. (A. M. H.)  INOUYE, KAORU, (1835-1915), Japanese statesman (see ), died Sept. 1 1915. Although he passed the later years of his life in retirement in his villa in Oiso, a seaside resort near Hakone, he was invariably consulted when matters of moment arose in politics or finance, and his name will go down in his country's history as one of the five Meiji statesmen, namely, Princes Ito and Yamagata, Marquesses Inouye and Matsukata and Count Okuma.  INSURANCE (see ).—Insurance, or assurance, divides itself into several main classes. Although the distinction is not always observed, the word assurance is usually applied to life business and insurance to the acceptance of risks other than that of life. In an ordinary life assurance or endowment assurance contract the policyholder has the knowledge that either he or his dependents are assured of the payment of a sum on the occurrence of an event that must happen. In the various forms of insurance, such as fire insurance, marine insurance, accident insurance or burglary insurance, the policyholder pays a premium in order to be insured against a contingency which, if he is an honest man, he hopes will never occur.

During 1910-20 there was a pronounced tendency among British insurance companies to amalgamate. The development of the fusion idea began on a large scale when fire-insurance companies absorbed the marine-insurance companies. There were formerly a large number of offices registered in the United Kingdom transacting only marine insurance. In 1921 there were only one or two which had not been taken under the wing of a fire company; and the large insurance offices transacted all the principal forms of insurance. In normal years they derive the bulk of their profits from fire insurance, but during the war period marine insurance proved exceptionally profitable. The earnings from life insurance are comparatively small, owing to the competition of mutual offices which have no shareholders to consider. Underlying all the fusion schemes of past years seems to have been the idea of connexion. The managements considered that it was essential that they should be able to offer to the assured every form of policy, or otherwise the man who was insured against one risk with a particular office would, sooner or later, be induced to effect other assurances with it or to transfer existing policies to it.

The business of the British insurance offices is world-wide, mainly as far as fire, marine and workmen's compensation insurance are concerned. London is a great school for insurance, and credit for much of the development of the business belongs to the underwriters of Lloyd's. Underwriters acting for themselves, or for a few friends, represented in a syndicate, doubtless feel freer to act than the managers of companies who have to report to boards of directors. In any case Lloyd's underwriters have shown a great deal of enterprise in accepting risks of a novel kind and thus in creating new markets. No ordinary life assurance is transacted at Lloyd's.

Life Assurance.—Life assurance was fundamentally affected by the World War. It will always be to the credit of British life assurance that, in spite of tremendous blows, no office failed to fulfil any contract into which it had entered. All actual sums assured were paid in full. At the same time, the majority of the offices failed to distribute bonuses on participating policies or else allotted bonuses at a reduced rate. The ill-effects of the war fell upon the participating policyholders. Until the war broke out the progress of the offices had been so steady and their success so great that the likelihood of their being unable to distribute profits hardly entered into the minds of most people. Life-assurance agents, basing their calculations on pre-war experience, were quite able to reason that the participating policies, in many cases, represented much better

value than the non-participating contracts. The faith of the public in participating policies was rudely shaken by the experience of the war. There was subsequently a reaction, and non-participating policies became the popular form of contract. This change of feeling was really as short-sighted as the previous blind faith in participating policies. The public was thinking of the passing of bonuses during the war, and forgot that the causes responsible for the passing of distributions, such as heavy depreciation of funds and heavy mortality, no longer obtained, and that, with a prospect of appreciation of security values, the outlook for profits was exceptionally favourable.

Much valuable information on the effects of the war on life assurance was contained in the paper read by Mr. H. Brown, Assistant Actuary of the Commercial Union Assurance Co., before the Insurance Institute of London on Dec. 20 1920. Mr. Brown stated that, excluding offices which transacted industrial life business as well as ordinary life business, and those which had started to undertake life assurance since 1914, there were 44 leading British ordinary life offices at the end of 1920. Thirteen of these maintained, or slightly increased, their pre-war bonuses at their first valuation after the outbreak of war; nine reduced their rates of distribution; and 22 (exactly half the total number) either postponed their bonus distributions or passed five years' bonuses altogether.

During the war the tendency to postpone bonuses steadily increased. Forty-two of the 44 offices mentioned were in the habit of making quinquennial valuations. Of those valuing at or about the end of 1914, 2 out of 10 postponed or passed their bonuses. In 1915 the corresponding figures were 3 offices out of 12; in 1916, 3 out of 5; in 1917, 8 out of 8; and in 1918, 6 out of seven. Almost all the offices made arrangements for the payment of interim bonuses on policies which might become claims before the next valuation, although such rates were usually below those of the pre-war period.

The offices which made their valuations for the five years ended 1914 again came to make quinquennial valuations as at the end of 1919. Of six offices which maintained their bonuses in 1914, only two again maintained them. One of these and also the only office valuing quinquennially which maintained its bonus in 1918 were composite companies not keeping separate investments for their life funds, but content to make good the bulk of the depreciation out of the general funds. Apart from these two special cases, only seven ordinary life offices succeeded in maintaining their bonuses, and four of these, which formerly kept exceptionally strong reserves, absorbed part of these reserves in paying bonuses.

A number of highly important offices made their quinquennial valuations as at the end of 1920. The majority of these made no distribution of profits. Depreciation of securities swallowed up sums which would otherwise have been available. One office paid what was regarded as a satisfactory rate of distribution, its power to do so being due to profits from exchange.

An estimate of the war losses during the five years 1914 to 1918 inclusive was made by Mr. Brown as follows:—

(1) Mortality in excess of the pre-war ratio resulted in a loss of about £3,000,000 a year.

(2) Depreciation in excess of the amount provided for just before the war was estimated at £4,000,000 a year.

(3) The reduction in the net rate of interest due to the high income tax resulted in a loss, as compared with the pre-war period, of about £500,000 a year.

The total loss, as compared with the period immediately preceding the war, could therefore be estimated at, roughly, about £7,500,000 a year during the five war years. In the years immediately preceding the war the total divisible profits of the British offices, in respect of ordinary life assurance, amounted to about £6,500,000 a year, of which about £6,000,000 was divided among the policy-holders, and about £500,000 was distributed among the shareholders of the proprietary companies. During the war the normal profits continued, for the most part, to be realized, subject to the deduction of the special war losses enumerated. The special war losses, it will be seen, exceeded the normal profits of the same period, and it may therefore be