IMPROVEMENTS IN INDUSTRIAL INSURANCE 491
because he is in a class with high mortality, will, if he persists long enough, and has the right form of policy, be able to secure an annuity for old age, at a lower rate than well-to-do persons, just because he belongs to a class of whom relatively few survive the sixty-fifth year. The comparisons most important for the purpose of this paper are not those between ordinary and indus- trial insurance, but between private insurance and compulsory social insurance.
In the ordinary department this company has reduced ex- penses 6 per cent, in five years, an annual saving of over $1,250,- 000. All of its policies are written on the non-participating plan. The Metropolitan pays its dividends at the start — it cuts down the premium. The company upon its total business has in the last ten years reduced its ratio of expenses to premium income 1 5 per cent.
III. REASONS FOR REDUCTION OF COSTS IN THE INDUSTRIAL
COMPANIES
In its early stages, it was quite uncertain whether the system would succeed at all. The death claims were very high, caused by the fact that the insured, perhaps, in those days, fifteen to thirty years ago, was not so well cared for as now,^ and the expense was very high in establishing the business.
The Metropolitan Life has within the last five or six years steadily reduced its expense account, so that the savings today, as compared with ten years ago amount to nearly five millions of dollars.
A representative of the Metropolitan said :
In the course of these years we have paid back $15,000,000 to the policy- holders, and their policies did not promise it. This act cannot be said to be a gratuity, it is an act of justice, it is a reduction of premiums. To reduce premiums at the outset is to write bankruptcy. You do not know what your experience is going to be. First you have got to figure to do your business on a safe plan, and then figure how to give the profits, when they begin to accrue, to those who gave them to you. As the only equita- ble means we have given them back to the policy-holders in various ways; first, by increasing the amounts of policies according to the time they have
- Has medical examination and selection become more severe ?
