Several companies have already begun the reform by grading
commissions; granting a percentage proportional to the amount of
insurance likely to be done on the policy. Other companies have simply
reduced the amount of the commission rate, thus virtually withdrawing
from active competition.
This will, in a certain degree, explain the wide variation in the
figures given above, where it is noticed that, in five companies out
of twenty-two, the total agency expenditures amount to less than the
general expenses, while in six cases the companies spend more than
double as much on the former as on the latter. In either class we find
representatives of the five largest companies in the country.
On applying the foregoing ratios to the business of the existing
companies we find that, calling the theoretical expenses $100, the
actual expenditures for 1889 were as follows: $112.67, $118.34,
$150.40, $194.48, $208.16, $208.53, $228.66, $235.89, $248.44,
$250.79, $258.33, $258.57, $265.14, $267.19, $267.92, $274.47,
$294.17, $314.96, $335.70, $377.94, $616.70.
In this discouraging exhibit there is one ray of comfort. The combined
assets of the two companies heading the list amount to over
$100,000,000.
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