of Board of Directors: Messrs. Frank Van Voorhis, E. A. Simonds, Charles E. Bliven, J. H. Caswell, Geo. W. Hayes, E. C. Lewis, William E. Page, M. H. N. Raymond and H. C. Alverson. Mr. C. C. Hine Mr. Chairman, there seems to be a moment's time just now, and I would like to improve it by recognizing the very graceful and very attractive treatment of the Local Agent, received at the hands of Mr. Hubbell in the admirable paper which he has just read. Forty years or so ago I was a Local Agent, and I knew just about as much as brother Hubbell accuses him of knowing. I was as loyal and as virtuous as I knew how to be, and the probability is, just as Mr. Hubbell states it, that my very blemishes grew out of my virtues. We are accustomed to hear the Local Agent a good deal raked down in the conventions of the older members of the profession, and in the name of the Local Agent, and because I was a Local Agent, and have never forgotten the tribulations of those days when I tried faithfully to serve my company and myself, I desire to thank Mr. Hubbell for the graceful and attractive portraiture of the Local Agent that he has just delivered. Mr. Frank Van Voorhis While there is a moment's lull, I will request the Committee on Nominations to meet in this room immediately at the close of this session. Mr. McMillan I would like to suggest that, as it is very nearly 12 o'clock, we now adjourn until the hour appointed to-morrow morning. The motion was seconded by several voices. The President Gentlemen, the motion is made and seconded that we now adjourn. If we do so, I hope you will be present at 9:30 sharp in the morning. The motion was then put and the meeting declared adjourned. SECOND DAY. MORNING SESSION. OCTOBER 8, 9:30 o'clock. The meeting was called to order by the President at 9:30 o'clock. On motion of Mr. Howard Gray the reading of the minutes. of the previous session was dispensed with. The President I wish to call your attention, gentlemen, to the value of the gift of the widow of Mr. Jacob Peetrey. Mrs. Peetrey has presented to the Association the insurance library of her late husband, and it seems desirable that we express our appreciation in a suitable manner. Mr. Charles Richardson I move that a committee be appointed to properly acknowledge the gift of Mrs. Peetrey. Mr. George W. Hayes I second the motion. The President then appointed the following committee: Chas. Richardson, W. F. Fox, L. J. Bonar. The President then read the following telegram from the President of the Ætna Insurance Company: HARTFORD, CONN., October 9, 1891. H. C. Eddy, President, Grand Pacific Hotel, Chicago, Ill.: Twenty years ago to-day the Etna lost, by 'the burning of your city, nearly four million dollars. Its directors at once said unanimously that its good name should continue untarnished, and that its policies must always be kept at par. So far that standard of good faith has been maintained, and its future was never brighter than to-day. Congratulations, and beg of you as underwriters to take high grounds and be true to each other. J. GOODNOW, President. The regular order of business was then taken up. The President Gentlemen, our first paper this morning will be from one who has. been a steady worker in the New England field for twenty-five years or more, a part of that time without any concert of action with others, but since the formation of the Exchange, under his able guidance as President, a vast improvement in the business has been observed. Some of the difficulties which we have to encounter have been met by this Association in New England, and we may be able to learn from Mr. U. C. Crosby, the President of the New England Insurance Exchange, something valuable regarding the necessity for concerted action looking to the improvement and inspection of risks. I have the pleasure, gentlemen, of introducing Mr. Crosby. NECESSITY FOR CONCERTED ACTION IN IMPROVEMENT AND INSPECTION OF RISKS. Mr. Crosby MR. PRESIDENT AND GENTLEMEN OF THE FIRE UNDERWRITERS' ASSOCIATION OF THE NORTHWEST: When I received the invitation from your President to deliver an address on the subject of the "Necessity for Concerted Action in Improvement and Inspection of Risks," I expressed a doubt as to my ability to present the question in such a manner as to arrest and hold your attention, and the doubt has not been removed by coming personally in contact with the representatives of this Association. I understand well the ability, push, and energy displayed throughout this great Northwest in every branch of business, insurance not excepted, and the man must be bold, indeed, who would stand before you with the expectation of presenting new thoughts and ideas on a subject previously considered by you. It is true, however, that the soldier working in the trenches, at the front, fighting hand to hand with the enemy, obtains an experience unknown to those who as yet have not been in the thick of the fight. As such do I come to you-a private in the ranks, a Special in the field, engaged in an encounter with conditions and influences working against the interests of the companies we have the honor of representing. I shall try to present the subject of improvement and inspection of risks in a practical way, and if my conclusions seem to you wild or visionary, I ask you to consider the different standpoints from which the question may have been presented and considered. Permit me to refer to certain conditions in New England which have forced representatives of Stock companies to unite in the con sideration of automatic sprinkler protection, and to introduce a partial system of mutual inspection, with the hope that they may suggest to you ideas worthy of consideration. We have been subjected for many years to sharp competition on manufacturing risks from a class of Mutual companies. The first of this class was organized in 1835, and their number increased with their success, until, at the present time, twenty are doing a successful business. We have sustained a gradual loss of premiums from this source, and now a large proportion of our best manufacturing risks are insured by them. For more than twenty years I have been in the field, listened to, and in part shared the expressions of doubt as to the success of this class of companies, yet in spite of such doleful predictions they have continued to prosper. Up to four years ago our Stock companies predicted, grumbled, protested, and looked with a kind of stupefied wonder at a class of hazards which had proved unprofitable under our care and management, passing into the hands of Mutuals, and being written by them at a large reduction in cost. At that time we made no attempt to solve the problem of their success and our failure, nor did we inaugurate any system to meet their competition. I desire here to express my respect and admiration for the practical methods and good sense which in general have characterized this class of companies in New England as regards protection and inspection of their manufacturing risks. To the shame and mortification of Stock underwriters must it be said that the Mutuals are pioneers in the consideration of these questions which are so vital to the interests of the insuring public and underwriters. The fact that we were forced into their consideration in consequence of competition, and not by our own foresight and judgment, is certainly not agreeable or flattering, but we are dealing with facts, not theories, and it is the part of true wisdom to look the situation squarely in the face, and by a careful study into the mistakes and errors of the past, strengthen our position in the future. About twelve years ago a representative of a now prominent sprinkler company, presented to certain representatives of Stock companies, more particularly in New York, the merits of that system of protection, and made most elaborate and exhaustive tests, and efforts were made to interest the leading underwriters in the system. This representative says: "I interviewed and tried to interest a large number of leading insurance men, and extended invitations to practical tests which we made, but there was not a single prominent insurance man who took the trouble to witness our experiments; in fact, I do not remember of any insurance representative being present. Those who knew anything about it were really impressed with the value of the apparatus at that time. The fact was, there was a determined opposition to any plan for reduction in rate of insurance for the reason of making the property more safe. In fact, there was no disposition to investigate or consider any apparatus which had for its object protection of property. I could get no definite action whatever on the part of Stock underwriters, and those who were most pronounced in their opinion held that such an apparatus, if practically valuable as a means of preventing fire loss, would be antagonistic to the pecuniary interests of insurance companies." The sprinkler companies were forced to turn, as they did, to the Mutuals for help and encouragement, and this system of protection was extensively introduced into manufacturing risks insured by them. It came to be generally understood that if a risk was protected by automatic sprinklers it would go into the Mutuals, and our agents would receive an inquiry from the assured on this subject with a cold shiver, and we, if questioned, were obliged to say no information could be given. It seems strange, but is nevertheless true, that this system was introduced and became a positive feature of protection for more than eight years, while Stock underwriters remained densely ignorant on the subject. We were forced by the constant and increasing loss of business to study into and determine the cause of this transfer. The idea is often presented, and quite forcibly, that the Mutual feature has much to do with their success, but I feel sure that this is not a fact. I speak as one who has been placed in close contact with their method, and the feelings and prejudices of the insuring public. Their success is not due to the mutual plan, but to the practical methods adopted and put in operation by them. The mutual feature acts in many ways as an impediment to the proper protection of property. Where every policy-holder is a stockholder there must be more or less influence in consideration of risks, and inclination not to follow every risk up to an equal or approximate standard, and the result is a partial and imperfect equipment in quite a proportion of their risks. There are three special features, the cause of their success, pertinent to the subject under discussion, to which I desire to call your attention: FIRST-Protection. |