Mutual Fire Insurance Companies

Abstract

Trends among farmers' mutual fire insurance companies indicate that there is need for analysis and comparison of their operations for the guidance of officials of the companies themselves and of their farmer members. In some states, at least, it would benefit farmers if a member of the agricultural college staff were prepared to counsel the officers of such cooperative companies in the light of established facts about their businesses. Analytical data such as are described in this article might answer such a purpose. 'They might also serve as a basis for information available to farmers generally for guidance in insuring their property. A method of analyzing the businesses of individual farmers' mutual fire insurance companies is outlined below. The period selected is the decade 1921 through 1930. The data used are derived from the annual reports of 16 domestic Maryland mutuals originally organized as county companies insuring chiefly farm property. All of them still have a considerable farmer membership and a few insure farm property almost exclusively. Ten are advance premium companies, while six operate on an assessment basis. Their annual reports on standard forms are on file in the office of the Insurance Commissioner of Maryland. In almost all states, similar data, in more or less detail, covering the domestic mutual fire insurance companies are available in the files and reports of the official in charge of insurance. Each individual item of expense for each company was summarized for the 10-year period, 1921 through 1930. In some instances, expenditures reported under the wrong heading were transferred to their correct place. Many items originally reported under miscellaneous were placed under headings to which they could be properly assigned. Data for each company were then reduced to a comparable basis by expressing them in terms of cents per one hundred dollars of average net insurance in force. The figures so derived are given in Table 1. The last item before the total is a reconciliation of all entries relating to realized and book losses on investments, Items 35 and 36 in the report, with Items 33 and 34 of the income statement, covering realized and book gains on investments. Where a net gain for an individual company appeared as a result of this reconciliation, it was included in the income statement, a sum-