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Ashland 53.739.60 1,074.73

Antigo 49,373.69 987.49

Watertown 48,150.39 962.96

Waukesha 44,668.62 893.54

Rhinelander 37,076.61 741.48

Marshfleld 36,927.99 738.46

Chippewa Falls 36,870.40 737.43

Stevens Point 34,588.77 691.72

Grand Rapids 33,991.03 679.60

Oconto 27,710.42 554.14

Deaver Dam 26,976.21 540.15

Stoughton 26,598.40 531.86

Pt. Washington 25,655.56 513.11

Premfums and Losses in Classes op Cities

Beginning with the year 1911, the fire insurance companies
have been required to report to the insurance department sep-
arately, the premiums and losses for each city and village in
the state entitled to fire department dues. The department has
compiled these reports for each city and village for the years
1911, 1912 and 1913, and the totals for the three years with the
ratio of losses and premiums, and the annual average per cap-
ita loss for the three year period. This table is printed here-
after.



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Report of the Commissioner op Insurance. xxxv

The period covered is naturally too short to give any reliable
information with regard to the general loss ratio in any indi-
vidual city or village. However, it is certain the table will be
very interesting to citizens of diflEerent cities and villages as a
comparison between premiums and losses, and as an encourage-
ment to bettering conditions toward the reduction of losses.

Summarized, this compilation for the three year period by
classes of municipalities gives interesting data as shown by
the following table :



Summary of tables showing the total premiums and losses by cktsses in cities
and towns for the years 1911-19 12-19 IS.



Kind of cities or towns.



Milwaukee

Cities over 25,000 except Mil-
Cities between 5,000 and VsVoOo' *. .' !

Cities between 1,500 and 5,000

Below 1,500 in fire department
districts



Total

Oatside fire department districts

except town mut uals

Town matuals

Total outside fire department

districts



Grand total .



Total
premiums.



$6,257,101

3,885.704
4,272.444
2,806,210

2,010.813



810,101,371



$4,692,514
2,847.964



$7,540,478



$25,731,849



Total



696.781

286.765
598.883
242.539

183.466



$8,00', 934



964.748
370^563

335,311

843,'2'45



Ratio

losses

to

premiums.



43.1

38.55
87.41
44.3

58.57



ATera«re
annual
loss per
capita.



$2.41

1.06
1.88
2.18

3.10



41.73

41^7
83.25



46.17



$ 2.24

.89
"$1^27"



Popula
tion
1910.



873.857

218.930
282.780
189.921

127.162



1.192.650



255.575
885.635

iTlTl^



2.333.860



The period is rather too short, especially in view of the ter-
ritory covered, for any very definite conclusion. The figures
seem to indicate that, excepting Milwaukee, where the values
are higher and more congested, the larger cities in the state,
with their superior fire and police protection, show proportion-
ately the best record with regard to losses, and that the record
grows worse with the smallest cities. While the experience
for the property outside of fire department protection is de-
cidedly better, the record for farm property shows a high loss
ratio, but this is directly due to the very low rates charged by
farmers' town mutuals.



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xxxvi Report op the Commissioner op Insurance.

Fire Drooping Our Cities

The congested parts of our cities can be made conflagration
and fire proof immediately. A complete sprinkler equipment
will do this for an entire city district the same as it now does
this for an entire mercantile or manufacturing plant. The
whole cost IS ordinarily repaid from the reductions in the in-
surance premiums during four to eight years. An investment
would be considered good anywhere that pays for itself in this
time and yields an equal profit 'each year afterwards. This has
the added advantage of giving practical immunity from business
interruptions and loss of property and life by fire.

There is no financial, physical or engineering reason why this
should not be done. Every interest of the property owner
makes it desirable. There are two reasons why it has not been
done. One is indiflference and lack of information on the part
of property owners and the public. The other is the perhaps
largely unconscious opposition of those who handle the large
insurance premiums which would be cut to half or one fourth,
or ^ven less, l)y such change.

Sprinkler Equipment

Sprinkler equipment is a system which automatically throws
water upon any fire starting in a building. Ordinarily this
water is carried from a tank and the city mains through parallel
piping under the ceiling to sprinkler heads so placed as to be
from 8 to 10 feet apart each 'way. These heads open by the
melting of a fusible metal at about 150° P. immediately ex-
tinguishing any fire below. The effect is to make a building
properly equipped and protected practically fire proof provided
the equipment is kept in order.

This equipment may now be seen in the larger stores and fac-
tories, most of which are now so equipped. For forty years the
New England Factory Mill Mutuals have confined their insur-
ance almost wholly to sprinklered properties. Their rate of loss
is about 5 ^2/3 cents per $100 at risk, as compared with a gen-
eral loss rate of 49 cents on all property in the United States.
Before sprinklers were installed, the losses on cotton mills and
other property insured by these companies were so great as to



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Kepor* of the Commissioner op Insurance, xxxvii

make them unprofitable at rates from $1.00 to $3.00 or even
higher.

Sprinklered risks are now written by the Mutuals at rates
which, omitting the element of interest on the deposit premium,
run as low ka 4 cents per $100, and stock companies are taking
the sprinklered risks on rates ranging down to 15 cents and 12
cents, or even to 8 cents per $100. Against this, the average
insurance premium rate for all property throughout the United
States is 97 cents per $100, and the average rate for all property
throughout Wisconsin is $1.04 per $100.

Equally Effective and Economical for Small Properties

The advantages of sprinkler equipment are not confined to
large properties. To make the supply of water certain at all
times, there must be two sources of water supply, to provide
which becomes comparatively expensive for small properties.
The city water main ordinarily furnishes one source of supply.
The other is secured from a tank placed above the highest line
of sprinklers, or from air pressure tanks or specially designed
pumps. Sprinkler protection may be made as effective and as
economical for small properties as for large properties by the
cooperation 'between adjoining owners in providing the addi-
tional water supply from a common source.

Entire Congested District Must be Covered

Such equipment should cover the entire congested section of
a city. If no fire can get a start, there will be no considerable
losses and no conflagrations. To secure this result, the equip-
ment must be standard two source, properly installed and effi-
ciently *and regularly inspected, so that it shall be in good work-
ing order to catch any incipient fire. It must cover every part
of the district. It must also be protected against extraordi-
nary exposure fires from outside the district. Such other
changes and improvements as necessary will inevitably come
about along with such installation. Thorough inspections and
the resulting greater care should reasonably reduce the number
of fires and the amount of losses by one-half. Sprinkler pro*



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5cxxviii Report op the Commissioner op iNsuRAJtcfe.

tection goes further, in that it is designed to catch every fire
and practically eliminate losses. In this respect it is even more
effective than the best fire proof construction which does not
prevent the burning of combustible contents. It does not wait
for the slow process of rebuilding. Its benefits follow imme-
diately and apply to all classes of buildings and to the contenta

Milwaukee Should be Sprinklered

Milwaukee pays fire premiums exceeding $2,000,000 per year.
The larger part comes from the congested district. Some of this
is already sprinklered. More will naturally be sprinklered within
a few years. It is not a great additional step to Isprinkler all
the rest. The savings in insurance premiums alone will pay
for all the cost in a few years. Large financial corporations
are installing and selling these equipments to property owners
for the savings in insurance premiums during four to eight
years.

Investigation to Save Over $2,750,000 Proposed

The city of Milwaukee could spend money to no better advan-
tage than for a thorough investigation of this problem by the
most competent engineers obtainable. The cost of one such in-
vestigation would be" a trifling amount compared tb the annual
charge of nearly $750,000 now spent for the fire department,
over $2,000,000 paid for fire insurance premiums, and the in-
conveniences and loss of life and property involved in an an-
nual $1,000,000 fire loss.

Support Fire Chiep, Sprinkler Basements

The chief of the fire department of the city of Milwaukee has
already urged the sprinklering of all basements. Without
doubt this would prevent the larger number of fires. It cer-
tainly would wipe out the larger amount of losses. It would
also prevent the injuries and loss of life so frequent in baser
ment fires. While Sub-Standard equipment is not recom-
mended, a single source of supply connected direct with the city



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Report of the Commissioner of Insurance, xxxix

main would be very inexpensive and comparatively efficient.
Considering the small expense, it would probably' be met through
savings in insurance premiums in even less time than indicated
above for a complete equipment.

All Cities Affected, State Interested

The problem is one affecting all the cities in the state, and as
the cost of this fire waste, the expense of insurance and fire de-
partment and other protection, is added to the price of every-
thing made and sold, such investigation might very properly be
made through a special committee of the legislature with ample
authority and appropriation for the purpose. The most thor-
ough investigation might be secured through the cooperation of
the state and the cities for this purpose.

Certain to Come When Ui^erstood

All that is needed to bring this about is a thorough under-
standing on the part of property owners and the public of its
practicability and advantages. If the problem and its import-
ance is understood, no legal questions will stand in the way.
The time will come, if not here, when the property owner who
fails to avail himself of recognized protection against fire "must
answer to his neighbor in damages for fire spreading 'from his
property. When the advantages are understood there will be
none to object. There is no law against what all want for the
benefit of all.

Shingle Roof an Unnecessary Danger

Another problem which particularly affects Milwaukee, but
which also is serious in many other cities in the state, is that
of the combustible shingle roof. Were this eliminated, the
chances of a conflagration would be largely removed from the
residence districts of our cities. The advance in building ma-
terial has in recent years been such that noncombustible roofs
can now be provided at a very slight addition in cost to the
cost of shingle roofs. In fact, considering the cost of up-keep,
the 'cost would probably be less than otherwise.



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xl* Report of the Commissioner of Insurance.



Consolidation of Fire Prevention Work

A consolidation of the offices of oil inspector and state fire
marshal with the department of insurance was recommended by
the Legislative Fire Insurance Investigating Committee of 1912,
with a view of bringing together the effective agencies for fire
prevention. The reasons then urged for making such consoli-
dation still exist. The use of the 'money now collected for oil
inspections for the purpose of the Fire Marshal Department
would make possible the Viping out of the present fire marshal
tax of the fire insurance companies. There is no necessity or
justification for this tax. The burden of the fire prevention
work should be bor. e in common by all property, insured and
uninsured. Furthermore, the moral 'support which the citizen
will give to fire prevention work is likely to be more hearty and
effective where it Is broadly understood to be for the general
purposes of the state and of the community rather than for the-
benefit of the fire insurance companies. Unfortunately, the lat-
ter is the inference which is largely drawn from the present
method of having the' Fire Marshal's office supported by a spe-
cial tax on the companies.

The Department Reports

The allowance for printing provided in the appropriations
for the insurance department was found to be insufficient
under the new printing contract for the printing of the report in
the old form. It was therefore necessary to reduce the space
allowed to each company in printing its annual statement. The
new form of printing the annual statements is therefore used
for a considerable nimiber of the companies in this volume. A
comparison of the new form with the old form will, it is be-
lieved, convince companies and others using the report that the
change is a desirable one, besides resulting in considerable econ-
omy in the expense of the department.

Prevention Reduces Insurance

Summarizing the situation in Wisconsin with regard to fire
insurance :

The people of Wisconsin pay much more than their just share



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Report op the Commissioner op Insurance. xli

of 'the premiums collected by stock fire insurance corporations
throughout the United States.

Losses in Wisconsin are being reduced more rapidly than
premiums.

Wisconsin leads in fire prevention work, promising still greater
reductions in losses.

The stock fire insurance business has been profitable to its stock-
holders, even through the ten year period including the San
Francisco conflagration in 1906.

Dividends, profits and gains have constantly increased since
1906.

Continuance of present conditions will yield excessive profits
in the future.

The fifteen largest companies transact half of the busimess and
take two-thirds of the dividends, profits and net gain.

Expenses are excessive and are increasing.

Too little money is spent for ratings and inspections to pre-
vent fires.

Too much money goes for commissions and acquisition ex-
penses. This is growing. The policyholder does not get' value
for his money.

Fire prevention work, to be permanent, must 1)e recognized
by a reduction of premiums, including expenses and profits, to
keep pace with reductions in losses.

The right of the state to regulate fire insurance rates has re-
cently been put beyond question* by the United States Supreme
Court.

States must supervise and regulate the making of rates.

The companies and departments should cooperate in provid-
ing data as to losses and hazards, necessary both for rate-mak-
ing and for fire prevention work.

Cities can be made practically fire-proof on eight year's sav-
ings in insurance premiums.

Cooperation Needed, not Controversy

The foregoing may seem a severe indictment of the stock fire
insurance corporations. It is not so intended. It is indeed a
severe arraignment and criticism of the methods by which the
business of fire insurance is transacted, but the blame for these



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xlii Report op the Commissioner of Insurance.

methods cannot be laid at the door of any particular class or
classes of companies or of public officials or of the people. It
is chargeable largely to the controversies over ratemaking which
have resulted in the anti-trust, anti-compact and anti-coopera-
tive laws of different states, and the attempts of companies and
even of the people, directly or indirectly, to avoid compliance
with archaic and uneconomic laws.

Knowledge op Conditions Necessary

A knowledge of the facts heretofore summarized is neces-
sary to an understanding of the present conditions. An ap-
preciation of these facts is also necessary to meet the arguments
of the stock companies with regard to supervision of fire insur-
ance rates by the state. The companies object to such super-
vision because they say that it is unnecessary and that rates
are sufficienty regulated by competition. However, they de-
nounce any failure to adhere to the fixed rates as rate-cutting, a
discrimination, and endangering the solvency of the company.
Then again they object on the ground that any regulation of
rates necessarily implies the reduction of rates.

People Entitled to Know and to Rule

The foregoing showing would plainly indicate that some ac-
tion is necessary. Granting to companies the right of coopera-
tion in ratings and in practices, and especially in the collection
of the rates, no one can question the right of the state and of
the people to full information with regard to the results. No
one who recognizes such right of cooperation, investing the busi-
ness of insurance in the highest degree with a public interest,
can question the right of the state and of the people to regulate
rates made or collected in cooperation or under agreements be-
tween the companies.

The Future op Fire Insurance

The business of fire insurance now occupies in the United
States, in respect to the amount of money handled, an import-
ance greater than ever before and whollv unknown in other



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Report op the Commissioner of Insurance. xliii

countries. This situation is not to our credit, nor will it con-
tinue indefinitely. It is probable that the volume of premiums
will in the future tend to decrease rather than to increase
From a public standpoint, this is highly desirable. These facts
must be taken into account.

Herman L. Ekern,
Commissioner of Insurance.

See recommendations of Legislation by National Convention
of Insurance Commissioners on pages Ixxxii to civ.



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xliv



Report op the Commissioner op Insurance.



Text Table No. 1.



WISCONSIN BUSINESS.



TABLE OF NET PREMIUMS AND NET LOSSES AND RATIO OP LOSSES TO PRE-
MIUMS 1904 TO 1918 INCLUSIVE AND FOR THE FIVE YEAR PERIODS 1904-1908
AND 1909-1918.





1904


1905


1906




Pre^.
miums.


Losses.


Ratio
46.2


Pre-
miums.

$485,150
4,407.226
1,827,701


Losses.


Ratio


Pre-
miums.


Losses.


Ratio


Stock Companies:
Of Wisconsin...
Of Other States,
ForeUm Fire. . . .


$458,022 $151,888
4,181.812 1.758.850
1,856.662 627,647


$138,905

1,965.082

581,884


36.8
43.7
438


$458,905
4.582,665
1.871.782


$181,965

1,685,885

556.868


28.8
87.2
40.6


Sub-total....
Foreign Marine.
Lloyds


5,945,906
21.005


2,587.880
17.528


42.7
88.5


6.810.077
10.717


2,680,321
15.968


42.5
149.0


6,868.302
53.610


2,874.718
20,104


87.8
87.5






















Total


5,067.001


2,555.408


42.8


6,320.794


2.696.289


42 7


6,416,912


2.894,822


37.8


Mutual Companies:
Of Wisconsin...
Of Other States.
City A Village..


24.971
106.583
178.196


14,245

28,868
101.684


57.0
24.7
57.0


28.825
117,661
284.234


21,689
69,691
158.502


76.6
50.4
54.0


41.681
184,052
858,895


16,681
97.604
199,262


40.0
72.9
55.6


Sub-total

Farmers


809.750
483.629


144,247
408,861


46.6
88.5


480.220
585.788


244,882
486.475


56.9
88.0


534,128
571,924


318,547
452.164


58.7
79.1


Total


798.879


548,108


69.1


1.015.958


781.857


72.0


1,106.052


765,711


69.2






Grand Total


$6,760,380


$3,108,516


45.9


$7,886,747


$3,427,646


46.7


$7,522,964


$3,160,538


42



Text Table No. 1 — Continued.







1907 ' 1908


Five Year Period




Pre-
miums.


Losses.


R»«o J,^^^


Losses.


Ratio

88.8
49.0
47.5


Pre-
miums.


Losses.


Ratio


Stock Compares:
Of Wisconsin.
Of Other States
Forel«rn Fire..


$491,022
4,895.840
1,386.801


$144,619

1.867,882

685.576


29.5
88.1
45.8


$557,089
5,061.706
1.361.969


$188,164

2.478.771

647.374


$2,450,188
23.118.749
6.804,865


$750,586
0.755.470
3,048,709


80.6
42.2
44.8


Sub-total...
For'ffn Marine
Lloyds...... .


6,778,668
60,257
18.194


2.647.577

34.442

2.482


89.1
57.2
18.8


6,980,764
49,273
16,784


3.314,809
15.475
7,806


47.5
81.4
48.5


82.873,802
104.862
29,978


18,554,806

108,517

9,788


41.8
53.1
82.6


Total


6.847.114


2.684.501


39.2


7.046.821


3,887.0901 47.4


32,598.642


13,668.110


41.9


Mut. Companies:
Of Wisconsin .
Of Other St'tes
City & Village


48,958
123,206
407.357


24.772
84,111
201,525


56.8
68.8
49.5


41.764
120.965
540.041


16.461
67,709
818,771


39 4
56.0
58.1


180,699

602,467

1,777,228


98,848
847,488
974,604


51.9
57.7
54.0


Sub- total . . .
Farmers


574.521
646.957


310.408
500.666


54.0
77.4


711.770
598.668


402,941
469,545


566
79.1


2.560.889
2,881.911


1.416.025
2,312.711


55.8
80.3


Total


1.221.478


811,074


66.4


1.805,438


872,486! 66.9


5.442.300


8.728.786


68.5


Grand Total....


$8,068,592


$3,495,575


48.3


$9,352,259


$4,209.576| 50.4


$38,040,042


$17,896,846


45.7



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t^EPORt OB* tHE Commissioner of Insurance. xlv



Text Tftble No. 1— Continued.





1909


1910


1911




Pre-
miums.


Losses.


Ratio


Pre-
miums.


Losses.


RaUo


Pre-
miums.


Losses.


RaUo


Stock Companies:

of Wiscoufldn

of Other SUtes..
of Foreign Fire..


$551,580

f:g?:?!i}


$158,307

2.099.773

614,724


27.8
41.8
45.8


$568,953
5.067.675
1.890.889


$178,562

2.999,036

698.470


81.4
59.3
50.2


$601,805
5,092,170
1,454.599


$189,448

2,640,312

746,262


31.5
51.9
51.3


9ub-toUl....
Foreign Marine..
Lloyds


13.756


$2,867,804
25.875
7,340


41.1
63.6
58.3


$7,016,917
87.809
22.300


$3,876,064
37.396
20.102


55.2
98.9
90.1


$7,148,574
33.685
32.102


$3,576,022
6.409
10.943


50.0
19.0
34.1






ToUl


$7,028,522


$2,901,019


41.3


$7,077,026


$8,983,566


55.6


$7,214,361


$3,593,374


49.8


MnVal Companies:

of Wisconsin

of Other Slates...
City and Village.


$40,891
120.387
550.969


242,536


54.4
78.2
44.0


$46,015
138.085
602.931


$87,852
126.822
8^.762


80.7
91.9
59.7

66.6


$91,562
114,578
437.917


$56,025
100.426
803.516


61.2
87.6
69.3


Sub-total...
laterlnsurers... .


$712,247


$358,907


50.4


$787,981' $524,486


$644.(^7
11.763


$459,967

7,101

679.770


71.4
60.4


Farmers. .... .....


626.547


453.621


72.4


773.533


692.799


89.6


79.7






Total


$1,338,794


$812,528


60.7


$1,561,464


$1,217,285


78.0


$1,509,259


$1,146,888


76.0


Grand totaL


$8,867,316


$3,713,547


44.4


$8,688,490


$5,150,801


59.6


$8,728,620


$4,740,212


54.3



Text Table No. 1 — Concluded.





1912


1913


Five Year Pertod.




Pre-
miums.


Losses.


Ratio




Pre-
miums.


Losses.


Ratio


Pre-
miums.


Losses.


Ratio


Stock Comp*nies:
of Wisconsin..,,
of Other States.
Foreign Fire....


$585,369
5.037.687
1.578.860


$170,288

2.050.552

529.627

$2,750,467
16.112
18.362

$2,779,941


39.1
40.7
33.5

38.2
41.2
37.6


$586,549
5.216.875
1.546.319

$7,849,743
43.698
40.715


$157,823

1.834,223

534,813

$2,626,859
28.673
0.127


26.9
35.2
34.6


$2,894,206
25.485.157
7,311.877


$849,428
11,623,896
8,123,896


29.4
45.6
42.7


Sub-total.
Foreign Marine
Lloyds


$7,201,916
39,152
35.519

$7,276,587


34.4
65.6
22.4


$35.691.240'$15.597.220
195.02Q 114,465
144,392 IM.87i


43.7
58.7
42.2




._ _ 1








Total


38.2 !$7,434.156|$2.564.659


34.5


$36,030,652


$15,772,559


43.8


Mntl Companies:
of Wisconsin....
of Other SUtes.
City and vUlage


$99,159
154.562
874.531

$628,252

6.758

951.777

$1,586,782


$47,059
94,227
227.304


47.5
60.9
60.7


$185,075
863.533
806.578


$68,585

35.031

174.695


50.8

9.6

56.9

HJ

6.1

86.4


$413,602

891.145

2.272,926


$231,767

450.631

1.307,713


56.0
!>0.6
57.5


Sub-total.



Online LibraryWisconsin. Dept. of InsuranceReport → online text (page 4 of 94)