in insurance for gain ought to contribute to the state the same
share of its profits as other capital, yet the premiums, agencies,
policies and entire machinery representing only losses, and
providing for their distribution, should be exempted, as far as
the necessities of the public treasury permit.
One aspect of the taxation of fire insurance is of especial interest, namely, the very general disposition of legislatures and municipal authorities to impose upon the underwriters the cost of fire departments. The systematic prevention and extinguishment of fires are everywhere assumed to be proper work for the community at large. But the first license granted by the crown to issue insurance policies in London in 1687 was conditioned upon regular contributions by the authorities to support the king’s gunners as a fire brigade, and in the public mind the privilege of insuring the prudent has ever since been vaguely associated with the duty of guarding the property of the whole community. The voluntary support of fire patrols by the companies in London, New York and other cities has done much to promote this view; and a substantial part of the taxes paid upon fire policies in the United States is levied for the support of fire departments, the pay and pensions of firemen and similar purposes. The tendency to increase such taxes, under the pretext that the protection afforded is for the special benefit of the companies, is strong in some of the states; though it would be equally rational to compel life insurance companies to maintain general hospitals for the sick.
The most complete statistics of the fire insurance business collected in any country are those presented in the United States to the National Board of Fire Underwriters at each annual meeting. The following summary of part of the information submitted by the committee on Statistics.statistics, 10th May 1900, giving the amount of fire risks insured in the United States, premiums received for them, and losses paid upon them, by all joint-stock fire insurance companies for the year 1899 will serve as an example:—
Fire Insurance in the United States. Joint-Stock Companies.
| Companies. | Fire Risks assumed. | Fire Premiums received. | Fire Losses paid. | Premiums per $100 of Risk. | Loss per $100 of Risk. | Loss per $100 of Premiums. | |
| $ | $ | $ | $ | $ | $ | ||
| American | 218 | 12,251,299,499 | 93,577,169 | 59,119,018 | .7638 | .4826 | .6318 |
| Foreign | 35 | 6,087,570,275 | 42,958,472 | 29,865,014 | .7057 | .4906 | .6975 |
| All | 253 | 18,338,869,774 | 136,535,641 | 88,984,032 | .7445 | .4852 | .6517 |
These returns do not include mutual companies. The compilers of the Insurance Year-Book, however, obtain from the several state departments of insurance the reports of all companies made to them of the business done within each state; and from these it appears that in 1899, for example, 160 mutual companies assumed fire risks to the amount of $1,119,772,848. Many small local associations have made no returns, but their operations are too limited to materially affect the aggregate. It is noteworthy that while mutual companies transact less than 6% of the business of the whole country, yet in the state of Rhode Island, a densely peopled manufacturing community, they have more than 78%, and in Massachusetts nearly 24%; and that, while less than one-ninth of the insured property of the United States is situated in these two states, they contain nearly two-thirds of that which is insured by mutual associations.
The fire insurance business of foreign companies in the United States was comparatively small until 1870. Four strong British corporations were then in the field, and their transactions amounted to less than 9% of the entire joint-stock business. But their success attracted others in rapid succession, especially from Great Britain and from Germany, and in 1880, 19 foreign companies assumed 23.7% of all the risks reported to the National Board; in 1889, 23 such companies took 30.3%; and in 1899, 35 such companies took 33.2%. The distribution of the business among them is not given by the board tables, but can be gathered from the reports of the American branches to the insurance departments of the states, which are summarized in the Spectator Company’s Year-Books. The total net payments of the British and colonial fire insurance companies in connexion with the disastrous fire in San Francisco in 1906 amounted to over ten million pounds, and the prompt settlement of all claims strengthened considerably their position in the United States.
In the United Kingdom the statistics of fire insurance are less accessible and less complete, no official records being made of the local distribution of the property insured, while the published accounts of the companies are not sufficiently uniform and detailed to make a trustworthy summary of the entire business possible. Much of it is done by foreign companies, of whose British business we have no separate statement. A statement of the revenue accounts of the various British companies insuring against fire will be found in the annual Insurance Blue Book and Guide.
In the Dominion of Canada the insurance companies make detailed reports to the government bureau, and the statistics of the business are full and accurate. The following table shows the aggregate business of five companies in the Dominion in 1869 and 1907:—
| Companies. | Net Cash Premiums received. | Amount of Policies taken. | Amount at Risk in 1869. | Amount at Risk in 1907. | Losses paid. |
| $ | $ | $ | $ | $ | |
| Canadian Companies | 54,849,706 | 5,663,696,931 | 59,340,916 | 412,019,532 | 36,073,543 |
| British Companies | 159,372,986 | 14,745,342,255 | 115,222,003 | 937,240,828 | 105,203,259 |
| American Companies | 32,449,482 | 2,801,078,045 | 13,796,890 | 265,401,198 | 20,129,323 |
| All Companies | 246,672,174 | 23,210,117,231 | 188,359,809 | 1,614,661,558 | 161,406,125 |
Upon the continent of Europe the fire insurance business is conducted partly by local companies in each country and partly by the great international offices of Great Britain and Germany. The local associations in Austria, Germany and Switzerland are of three classes—public assurance organizations connected with local governments, private mutual companies and joint-stock companies. It is impossible to obtain balance-sheets of all, nor is any information available concerning the local distribution of the risks, or the whole amount of property insured. The capital employed by stock corporations in this business in each country, and the aggregate premium receipts and payments for losses in the last year of which a report is available will be found in the annual Post Magazine Almanack.
While most of the fire insurance business in the Australian colonies is in the hands of British companies, local institutions for the purpose have had a considerable development on the same general lines as in Great Britain and with similar freedom from interference by the governments. But no accounts of the receipts and losses are available, most of the companies conducting a marine or life insurance business, or both, under the same general management.
Beyond the limits of the great commercial nations, no satisfactory information is accessible concerning the practice of fire insurance. Even in Spain and Portugal there is far less intelligent interest in the subject than in neighbouring countries, and the agencies of foreign companies transact much of the business in the large towns. Six Portuguese companies have maintained themselves for many years, a few of them for nearly a century, and have established agencies in the Spanish islands and in Madeira. For other nations than those mentioned, the only systematic effort to collect the facts is made by the compilers of the Year-Book, and the results are extremely meagre. The great British and German corporations are zealous in extending their transactions to the commercial ports everywhere, and local companies are often formed in the British colonies. In addition to those in Canada and Australia some companies in South Africa have become financially important. Small native companies have been successful in establishing their credit in Japan, Brazil, the Argentine Republic, Chile and Peru. A considerable business is done in insuring the property of foreign residents in the Levant, on the coasts of Asia, in South Africa and the Pacific Islands, but mostly by European companies, and as an incident to the more general practice of marine insurance. There are several successful fire companies among the Dutch in Java. The small business in Mexico appears to be wholly in the hands of foreign companies.
