There is no question as to their financial standing, and
both show a large increase in membership over the previous year. I may
also say here that it is a difficult matter to get at the actual "cost
of insurance" in the various companies. Many of them, on their own
acknowledgment, do not compute the advance cost of carrying their
"amount at risk," and others, for reasons of their own, do not care to
state the figures. In cases where the correct figures were not
obtainable, I have assumed the cost to have been 1-1/3 per cent. of
the mean amount at risk.
If we should, in our comparison, omit the actual agency expenses and
commissions, the ratios would stand as follows:
Where I would allow $100 the companies actually used: $43.17, $55.90,
$65.21, $77.21, $82.39, $88.34, $91.99. $91.98. $92.19, $94.65,
$97.15. $99.55. $99.11. $102.86, $109.35, $125.05, $133.03, $141.92,
$195.90, $207.06, $287.72.
As might be supposed, the first two ratios are those companies before
alluded to. These companies might have doubled their advertising
account and expended $300,000 between them on agents' salaries, and
still have kept within my allowance.
Admitting, for the present at least, the reasonableness of the
proposed allowance for the expenses of the banking and insurance
departments of the business, we have before us the problem how to
equitably adjust the burden among the great variety of policies.
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