The Measure of Expenses in Life Assurance Companies

Abstract

Till recently, it does not seem to have occurred to anyone that there was a fatal defect in the usual mode of estimating a life company's expenditure, and we were content to go on in the old way of considering it as the ratio such expenditure bore to the total premium revenue. And, so far as my recollection goes, not even the offices that had been animadverted on for extravagance, thought fit to dispute the dictum on the ground that this method of calculation was erroneous. However, since the reading of Mr. Deuchar's paper, and the more recent publication of Mr. Sprague's letters, these societies have awakened to the fact that they have been much calumniated; and are now ready, as a complete answer to the charge, to point out that it is their new business that has cost the money. No doubt this is a perversion of their theory that Messrs.