THE RE-INSUR- 1
ANCE INDUSTRY
W? ' 5*" -M" j
Babson Discusses
Fire Losses
?w ? *? " ??
i J* By Roger W. Babson
Babson Park, 'Mass., June 9. ?
I like most insurance stocks, es
pecially those ot the good fire
comDanies. I am
often asked,
however, why I
invest my per
sonal money in
the Re-Insurance
Industry (in ad
dition to my in
vestments i n
H e r c h a ndise
Stocks) . There
are ten reasons:
I. Re-insur
UUCU IB HU auso- .
lutely essential
Industry. The BABSON
safety of both all Insurance com
panies and all the policyholders
of these companies necessarily
depends thereon. The more that
risks are divided, and spread, the
better for all concerned.
2. It Is a form of Insurance
which must be used by all kinds
of companies, ? large and small,
foreign and domestic, stock and'
mutual, "board" and "non
board," "unlpn" and "non-un
ion", "participating" and "non
participating", and son on AD
INFINITUM.
3. Too much socalled "re-ln
surance'' today consists of swap
ping policies between large In
surance companies and their sub
sidlaries or between other friend
ly Companies. Home day it may
be found that, this practice IB
like a man endorsing his own
note. Then there will be a Stam
pede to get bona fide professional
re-insurance protection.
4. The re-insurance industry
started in Europe; but moved to
the United States following World
War I. It has been again upset
by World War II. After peace
conies, the professional U. B. Re
insurance Companies will not on
ly have an opportunity to hold
their present business, but should
be able to take on much profita
ble business from direct-wlting,
fire-insurance companies in Eu
rope, South America and the
Par East.
5. Today the stocks of pro
fessional fire re-Insurance com
panies are depressed due to pre
sent extraordinarily high nation
al fire losses. Of the total of 25
such companies, operating in the
U. S., only one showed an under
writing profit last year. The en
tire industry, last year, lost $4,
666,000; that is, Incurred Losses
and1 Expenses were $50,820,000
compared with Premiums Earn
ed of only $46,154,000. As loss
es have always gone in cycles, the
time to buy any kind of insurance
stocks is when the losses are
greatest and the industry., looks
darkest.
6. The professional reinsur
ance companies are not involved
with agents or dependent thereon.
No one appreciates more than I
do what, all branches of the in
surance Industry owe to the
agents. Yet, too many direct
writing companies are today so
dependent upon their agents that
the company officials are not free
to do what they think would be
best for their company. Re-insur
ance company officials are whol
ly free from such entanglements.
7. Our nation is on the verge;
ot great progress lu preventing '
fire, marine, casualty and life i
losses. After World War II bet-;
?er living conditions, new build- j
ing codes, increased use of non-i
combustible materials, extended
water supplies with more efficient
fire and police departments, com
bined with sprinkler systems or
fire alarm, boxen in every building
should materially reduce losses;
fit fill kinds. As re-insuraiKe |
suffers most as tlie loss ratios In
crease, so these professional re
insurance companies should pro
fit most as these Iobs ratios are
reduced.
8. The professional reinsur
ance industry today is disorganiz
ed and has an inferiority com
plex. It is existing upon
"crumbs" thrown out by the big
companies when it should be the
leader of the entire insurance
field. In Europe, these re-insur
ance companies have led and dic
tated to direct-writing companies
the basic policies of first protec
tion. Some day our U. S. re-In
surance companies will enjoy a
much more important place In
fire, marine, casualty, life and
other branches of the Insurance
industry. Furthermore, the so
cial and political hurdles facing
the direct-writing companies
should re-act Ijeneficlally to the
professional re-Insurance compan
ies.
9. It Is true that this industry
Is now under a cloud; but I be
lieve it is fundamentally sound.
With the co-operation of the Na
tional Board of Fire Underwrit
ers, the National Fire Protection
Association, the Association of
Casualty and Insurance Execu
tives and the Mutual and other
associations* the industry can
perform a great service to all in
surance companies and to the na
tion as a whole. It needs only
? " I
organization and better co-opera
tion among its own group and
fairer treatment by the direct
writing companies which it is
now efficiently serving.
10. Finally, ami very import
ant as ail Inflation hedge, the
stocks of most professional re
Insurance companies are selling j
for considerably less than their ? j
liquidating value.
Without doubt the Are losses'
for 1944 will be largest, excepting!
1932, in the history of the United
States, namely about $400,000,
000. This compares with an av-|
erage of $317,615,500 for the!
past twelve years. But patriotic:
people will soon wake up and real
ize that insurance does not re
place losses; it merely distributes!
them over a large number of peo
ple. When a building burns in >
America, It hurts America Just
as much as if it were burned by
our enemies. People are now
about ready to recognize this and
be careful, first by preventing
fires, and secondly by immediate
ly going to the nearest Are alarm
box and calling the fire depart
ment. "There never was a fire
which could not have been put
out with a pall of sand ot water
when it first started."
?This list includes the Nation
al Association of Insurance Com
missioners, National Association
of Insurance Agents. National As
sociation of Insurance Brokers,
Associated Factory Mutuals, Na
tional Association of Fire Chiefs,
National Bureau for Industrial
Protection, Chamber of Commerce
of the United States, National In
dustrial Information Committee,
National Industrial Conference
Board, American Institute for
Property * and Liability Under
writers, Antl-Inflatlon Campaign,
and the Committee for Econom
ic Development.
GRAIW.tTKS
Greensboro. ? Miss Margaret
Lumpkin was to'fey graduated I
from The Wommffg College with I
the bachelor ?>f xience degree :n |
physical education. Daughter of ]
Mr. and Mrs. W. L. Lumpkin, 1- i
Vine Street, of Franklivton. she :
was a member of Recreation Hon- )
or group. Archery club. Dolphin
club, Seal club, Recreation Asso
ciation cabinet, and camp com
mittee.
Miss Lumpkin participated in
all campus sports, serving both
as coach and 011 varsity teams. A
dean's list student, she was also
a member of the choir. Education
club, Adelphian society, and i'lay
Likers.
Miss Matllle Irwin Hicks,
Franklinton, was today gradua
ted from The Woman's College
with a bachelor of arts degree in
French. Daughter of Mr. and
Mrs. D. C. Hicks, she was a mem
ber of TeausPsi Omega, honorary
French fraternity, of Dikean so
ciety, Education club, Internation
al Relations club. Le Cercle Fran
cais, and Y. W. C. A. A dean's
list student. Miss Hicks served as
proctor and junior advisor.
MRS HOWEIX D. WESTER
Funeral services for Mrs. How
ell D. Wester, 65, who died ? at
her home. Route 2, Louisburg,
Saturday afternoon were conduct
ed by the Rev. John Edwards
from the home Sunday afternoon
at 2 o'clock. Burial was in the
family cemetery near the home.
Surviving are her husband, H.
D. Wester; t*o daughters, Mrs.
John Mitchell attrf Mrs. J. M. Bar
tholomew. and a son. A. T. Wes
ter, all of Route 2. Louisburg.
CALL PHONE 283-1
FOR FIRST CLASS PRINTING
"the Fifth War Loan Drive ends Ju/y 8af
AMERICANS!
You in the factories. You in tHe offices. You
on the farms. You in the homes.
You cannot? you must not? fail to get be
hind your fighting man in this supreme, heroic
hour. *
He knows what's ahead.
Bloody, bitter fighting . . . superhuman toil
. . . hardship . . . pain . . . perhaps death
He's facing it He'll keep on facing it, as lohg
as there's breath in his body and blood in his
veins. /
But he wants to know whafs behind him.
And you have only a few days left to give
him the answer.
That answer will be written in the final
figures on the Fifth War Loan Drive.
r
For this is the crucial, the all-important
Drive. Never has the need for War Bond buy
ing been so great.
lb make the Drive a success, you? and
everyone else? must buy at least twice as
many Bonds as you bought in the last drive.
If you haven't yet bought your full share,
DO IT NOW ! The time is short ! Make YOUR
supreme effort in HIS supreme hour!
Remember? a soldier, your soldier, is wait
ing for his answer. What will it be . . . from you?.
And here are S MORE reasons tor
buying EXTRA Bonds in the 5th I
1 . War Bonds are the bast, the safest
investment in the world I
2. War Bonds return you $4 for every
$3 in 10 years.
3. War Bonds help keep prices down.
4. War Bonds will help win the Peace
after the war.
3. War Bonds mean education for
your children, security for you, funds
for retirement.
Buettfe, HARE THAN BEFORE! '
FIRST-CITIZENS BANK & TRUST COMPANY
* ?* ? I ' >
Louisburg, N. C. ???:?? Franklinton, N. C.
Barn Flues
.
We shall do all in our power
to take care of our customers'
requirements in barn flues and
repairs, but in order to do so it
will be necessary for you to
place your orders now.
Examine your old flues and
if you need any repairs bring
them in now and have the work
done. If you need a new set
give us your order now and we
will have them ready for you
in a few days. If you will co
operate with us we will proba
bly be able to take care of you,
but if everybody waits till the
last minute, as is the usual cus
tom, we can not possibly do all
the work and some one will be
disappointed and may lose
some valuable tobacco.
Now, don't put this paper
down and say, "Oh well, I
have plenty of time," for you
haven't. If you act now you
will be ready when your tobac
co is ready. If you don't act
now you may wish you had.
We will fill orders as received
? FIRST come FIRST served!
SHOP IN SOPTHSIDE
WAREHOUSE.
PLENTY OF ROOM.
No Traffic Congestion.
FURNEY EDWARDS,
Manager.
N f
ALL ORDERS RECEIVED
UP TO THURSDAY NIGHT
NOW READY FOR DELIV
ERY.
PLEASE COME AND
GET THEM.
SEABOARD
STORE CO., INC
D. F. McKINNE, President
Pay Cash and Pay Less
WHOLESALE ? RETAIL