Committee on Economic Security (CES)

Volume VI. Social Insurance

D. Insurance, Savings and Income


REPORT ON LIFE INSURANCE WITH SPECIAL REFERENCE IN INDUSTRIAL INSURANCE


By

Edward Berman
University of Illinois



REPORT ON LIFE INSURANCE WITH SPECIAL REFERENCE TO INDUSTRIAL INSURANCE

Edward Berman,
University of Illinois

TABLE OF CONTENTS

Page

Introduction

Part A. Summary of Report

Part B. The Report Proper

1. The Importance of the Life Insurance Business

2. The Cost of Insurance to the Policyholder

3. The Expenses of Operation

4. Mortality Experience

5. Types of Insurance

6. Policy Provisions

7. Does Insurance Fulfill Purpose?

Part C. Tables and Notes



INTRODUCTION

The material presented in the following pages is intended to give important data pertaining to the operations of the industrial insurance business in the United States. In order that the operations of this business may be more fully examined, considerable data are included which have reference to the ordinary insurance business as well. The extent to which the workmen who buys a policy of industrial insurance may in the future receive an adequate return for the money he spends, and the extent to which he benefits from the policies he buys, can best be determined by comparing the operations of industrial insurance and of ordinary insurance. The data presented in the following pages demonstrate conclusively that, compared with industrial insurance, ordinary insurance is not only less costly to the policyholder, dollar for dollar of protection, but that it grants greater privileges to the insured. In other words, the industrial policyholder, who, is, in the great majority of cases, a member of the working class, pays a higher price for the protection he gets, and receives less service in connection with this protection, than does the holder of an ordinary insurance policy, who is likely to be a member of a higher income-receiving group.
Ordinary insurance itself, however, comes far short of perfection. There is at least one insurance system in operation in the United States which sells policies to all ranks of people whether of high or low incomes and which grants, for a given outlay of money, protection in general of a more generous character than that which even the best operated of the private ordinary insurance companies give their policyholders. This system of insurance is known as the Massachusetts System of Savings Bank Life Insurance. (This system has been in opertion in the state of Massachusetts since 1908. It sells insurance to any person resident in the State or to anyone who works in the State regularly. At present it has in force more than one hundred million dollars worth of insurance. For many reasons its cost of operation is far below that of the companies selling ordinary insurance and very much below the cost of those selling industrial insurance.) To the extent that data concerning the operations of savings bank insurance in Massachusetts throw light upon the relative efficiency and service of both ordinary and industrial insurance sold by private companies, it seems pertinent to include such data in the following tables.
This report, then, may be said to be concerned primarily with industrial insurance, but is concerned with ordinary insurance to the extent that such insurance throws light upon the relative inefficiency of the industrial insurance business, and it is also concerned for the same reason with the data available concerning the operations of the highly efficient Massachusetts System of Saving s Bank Life Insurance.
The plan of the report is to present in Part A a brief statement on each important matter, summarizing the data available which seem to be most pertinent. In Part B of the report there is given a more adequate treatment of each point, generally based upon data contained in the tables presented in Part C.
The materials upon which this report is based come for the most part from official reports. The most important of these are the Annual Reports, Part II, published by the New York State Superintendent of Insurance, and the Annual Reports, Part II, published by the Massachusetts Commissioner of Insurance. In addition to these, use has been made of the Annual Compendium of Official Life Insurance Reports, published by the Spectator Company, of the Flitcraft Compend, and ot the Spectator Company's Handy Guide to Standard and Special Contracts. Data concerning the operations of the Massachusetts System of Savings Bank Life Insurance come from the records and publications of the Division of Savings Bank Life Insurance, the State House, Boston, Massachusetts. Much material, not of a quantitative nature, has been obtained from works on various aspects of life insurance and from reports of life insurance organizations. Specific reference to sources of information are contained in Part C.
Data have been taken from three sources in particular, the Spectator Company's Annual Compendium of Official Life Insurance Reports, the New York Insurance Reports, and the Reports of the Commissioner of Insurance of Massachusetts. These three sources of information report facts for different numbers of companies. The Compendium gives the most complete data. In 1932, its information covered 260 American companies, which had in Force $100,154,000,000 of life insurance. It reported returns from 68 industrial insurance companies, which had in force a total of $17,265,000,000 of industrial insurance. The New York reports cover the business of 53 insurance companies operating in New York in 1932, which in that year had in force a total of $86,358,000,000 of life insurance. Of these 53 companies, ten sold industrial insurance and hand in force a total of $14,880,000,000 represented by industrial policies. The Massachusetts report for 1932 covered the activities of 47 insurance companies operating in that State, which had outstanding a total of $87,002,000,000 of life insurance. Four of these companies had outstanding industrial insurance to an amount equal to $14,837,000,000. The difference in the amount of business covered by these three sets of statistical reports accounts for the fact that figures for given items in different tables are not always identical. It will be observed that the amount of business both of an industrial character and of life insurance in general done by the companies operating in New York and those operating in Massachusetts in substantially the same. Comparted with the amount of business done by all American companies, which are reported in the official Compendium, those operating in New York and Massachusetts are apparently responsible for nearly seven-eights of all the insurance business of the country. Every table accompanying this report indicates the source from the data in it is derived.
Most of the data presented is based upon the period of ten years from 1923 to 1932.


PART A
SUMMARY OF THE REPORT

1. The importance of the life insurance business.
A. In the year 1933 there was $97,985,000,000 worth of life insurance in force in the United States. Of this amount $71,919,000,000 was ordinary insurance, $17,154,000,000 was industrial insurance, and $8,912,000,000 was group insurance. In the same year there were more than 113,000,000 policies of life insurance in force. The number of ordinary life insurance policies was 31,925,000, the number of industrial insurance policies was 81,517,000 and the number of group policies was over 27,000.
B. The year 1931 constituted the peak year in the amount of ordinary insurance and of industrial insurance in force, whether counted by number of policies or otherwise. It was not until the year 1932, after the third full year of depression, that a decrease in the amount of insurance in force in the country was experience.
C. In the maximum year, 1931, the John Hancock Company had outstanding over 6,000,000 industrial policies representing an amount of insurance equal to $1,408,000,000. The Metropolitan Company had in that same year 36,922,000 policies of industrial insurance in force. These represented a total of $6,822,000,000 of insurance. The Prudential had in force 30,946,000 industrial policies, representing an amount of insurance equal to $7,373,000,000.
D. The ordinary insurance companies in the country sold their greatest amount of new industrial insurance in the year 1929, when the figure was $10,318,000. This was 59.8 per cent above the amount of new insurance sold in the year 1923. The John Hancock Company sold its largest amount of new industrial insurance in the year 1930, when the figure was $311,000,000. The Metropolitan's maximum of new industrial insurance was sold in 1929, when the figure was $1,209,000,000. In the case of the Prudential Company, the largest amount of new industrial insurance, $1,321,000,000 was sold in 1930. The maximum amount of new business done by all the industrial insurance companies was reached in 1930, when an amount equal to $2,783,000,000 was sold. This was 74.7 per cent above the amount sold in 1923.
E. The assets of all life insurance companies operating in New York, which includes all of the important companies in the country and many of the smaller ones, reached a total of $17,938,000,000 in 1932. By that year their surplus was equal to $1,145,000,000 and their reserves to $14,687,000,000. The premium income and the total income of all life insurance companies, both ordinary and industrial, increased regularly up to the year 1931. In the year 1932 there was a slight decline. The total premium income for all companies operating in New York was $3,120,000,000 in 1931, and the total income of these companies in that year was equal to $4,197,000,000. The industrial premium income of the John Hancock Company was equal to $61,595,000 in 1931. In that year the premium income of the Metropolitan equaled $340,093,000, and that of the Prudential equaled $326,578,000.
F. The income of the insurance companies in the United States increased up to the year 1931, as has been shown, at a time when the total national income of the United States and its total labor income were suffering considerable decreases. From 1929 to 1932 the life insurance companies of the United States took an increasing proportion of the national income. They received in the form of total income 5.2 per cent of the entire national income in 1929. By 1932 this proportion had increased to 11.8 per cent. Although in the year 1929 the total income of the industrial insurance companies constituted only 3.3 per cent of the labor and salary income of the country, this had risen by the year 1932 to 6.1 per cent. In other words, during a period of the most serious depression in history when every class of population appears to have suffered severely from a decline in purchasing power, the life insurance companies have been receiving an increasing proportion of the national income.
2. What the policy holder pays for insurance.
A. The cost of insurance to industrial policy holders is greatly in excess of the costs to ordinary policyholders. The cost of insurance which is sold by the savings banks of Massachusetts is considerably below that of the ordinary insurance companies and very much below that of the insurance sold to the industrial policyholders of the country.
B. During a period of ten years the average yearly net costs of ordinary straight life insurance issued by the companies at age 35 vary from two to nearly four times as high as is the case with the savings banks. (See Part B, Section 2.)
C. During a period of ten years the average yearly net cost of a $1000 twenty-payment life policy, issued at age 35 was 25 cents in the case of the savings banks, and was from $1.60 to $5.73 in the case of the 15 most important ordinary companies.
D. During a period of ten years the average yearly net cost of a $1000 twenty-year endowment policy, issued at age 35 varied from 1 cent to $3.90 in the case of nine of the most important ordinary companies. In the case of six of the important companies, such a policy resulted in an average yearly net gain over all premiums paid varying from 2 cents to $1.36. In the case of the savings banks there was an average yearly gain on such a policy of $5.
E. The premiums paid in the course of a year on a straight life policy, issued at age 35, by the industrial insurance companies are from 55 per cent to 65 per cent above the premium charged by the Massachusetts savings banks.
F. The industrial companies, for a twenty-year endowment policy issued at age 35, charge 45 per cent more than the premium charged by the savings banks.
G. The net cost over a five-year period of a straight life industrial policy issued at age 35 is from eight to over eleven times as great as is the case with a policy issued by the Whitman (Mass.) Savings Bank
H. The net cost for ten years of a straight life industrial policy issued at age 35 is from 12 to about 14 ¾ times as high as high as a straight life policy issued by the Whitman Savings Bank.
I. The net cost for ten years of a twenty-year endowment policy of an industrial variety issued at age 35 would be $43 in the case of the John Hancock and $44 in the case of the Metropolitan. During the same period the Whitman Savings Bank would have returned to the policyholder a net gain of $11.46.
3. Expenses of operation. The relatively high expenses of operation among the private companies is one reason for the difference in the cost of insurance to the policyholders. The expenses of operation of the Massachusetts Savings Banks are much below those of both the ordinary and the industrial insurance companies.
A. In the year 1932, the ratios of expense to premium income were 5.18 per cent in the case of the Massachusetts savings banks, 15.44 per cent in the case of the ordinary insurance companies, and 22.02 per cent for the industrial companies.
B. In the year 1932, eight ordinary companies had ratios of expense to premium income between three and four times as high, and seven between two and three times as high as that of the savings banks.
C. In 1932 the ratio of the industrial department of the John Hancock Company was nearly five and seven-tenths as high as that of the savings banks, the Metropolitan's industrial ratio of expenses to premium income was four and one-quarter times as high, and that of the Prudential was over three and nine-tenths times as high.
D. The fact that the expenses of operation of the ordinary insurance companies are relatively higher than those of the Massachusetts savings banks and that those of the industrial companies are even higher than those of the ordinary companies, is due to the nature of the agency system used by the companies and the relatively high salaries paid by them. The agency system is most costly in the case of industrial insurance, for in that case premiums are collected weekly at the homes of policyholders. The high commissions paid to both the ordinary and industrial agents has much to do with the relatively high expenses of operation. The Massachusetts savings banks have no agency system and, therefore, pay neither commissions nor salaries to their agents.
E. During the period 1909 to 1931 the ratio of the salaries to total income was 2.27 per cent in the case of the Massachusetts savings banks. In the case of the four companies selling both ordinary and industrial insurance, the expense ratio of the ordinary departments from the years 1915 to 1931 was 11.69 per cent and that of the industrial departments was 20.40 per cent.
4. Mortality experience. A second reason for the relative costs of insurance to policyholders is to be found in the nature of the mortality experience of the banks and the companies.
A. In general, the mortality ratios for industrial insurance have been in excess of those for ordinary insurance, and the mortality ratios for savings banks of Massachusetts have been better than those of the private companies.
B. The following are among the factors which seem to deserve credit for the relatively high ratios in the case of industrial insurance and the relatively low ones in the case of savings banks:
(1) The savings bank insurance system is newer than the life insurance companies and would thus normally be expected to experience a more favorable mortality ratio.
(2) Medical examinations are not required of applicants for industrial insurance.
(3) In the absence of a commission system for agents among the savings banks there is no strong inducement for the banks to oversell insurance to bad risks. The presence of the commission system and the pressure upon the agent to sell more insurance accounts in part for the underwriting of bad risks among the insurance companies. The effect of these influences are more pronounced in the case of industrial insurance than in the case of ordinary insurance.
5. Types of Insurance.
A. Two-fifths of all industrial insurance in force is endowment insurance, as compared with about 15 per cent in the case of ordinary insurance, and about 10 per cent or less in the case of savings bank insurance. Nearly all other life insurance is of the straight life type.
B. Endowment insurance is less satisfactory in general than straight life insurance for the reason that as pure insurance protection it involves too high a cost, and as a means of investment it yields a comparatively low rate of return.
C. Endowment insurance is especially undesirable when sold to industrial policyholders for the following reasons:
(1) Its high cost prevents the wage earner's family from being adequately protected in case of death.
(2) The fact that so much endowment insurance is sold to cover children in the wage earner's family results in insufficient coverage on the breadwinner's life.
(3) It is excessively costly as a means of investment for the wage earner, because it is sold and premiums are collected on it by means of the expensive agency system.
(4) The very high proportion of lapses in the case of all industrial policies results in the investment purpose of endowment policies being too frequently completely negated.
D. As in so many other respects (the savings bank policyholder is at the greatest advantage, since he is not likely to carry an endowment policy, and) the industrial policyholder is (in this respect) at the greatest disadvantage because he carries the larges proportion of endowment insurance.
6. Policy provisions.
A. Dividends to policyholders in the case of the Massachusetts savings banks and of the Aetna Insurance Company are payable after the insurance has been in force one year. Their payment is not conditioned upon the receipt of renewal premiums. In the case of the other important companies which pay dividends, they are as a rule not paid until the end of the first or the second year, and for that year are conditioned upon the payment of renewal premiums. In the case of industrial insurance companies, dividends are not payable until the policy has been in force five years. These dividends are generally not paid in cash. It may be said that the dividends of the savings banks are generally much higher than those of the ordinary insurance companies, and that the dividends of the latter are higher than those paid on industrial insurance.
B. Non-forfeiture privileges.
(1) Policyholders of the savings banks are entitled to receive a cash value if they surrender their policies at any time after six months, and in many cases even earlier. Persons holding policies with the ordinary insurance companies are, except in one instance, not entitled to surrender their policies for cash values until after the second or third year. Except in the case of those companies chartered by the State of Massachusetts, industrial insurance companies do not extend cash surrender privileges to their policy holders until after the insurance has been in force ten years.
(2) Paid-up and extended term insurance: Savings bank policyholders have the option of choosing either paid-up insurance or extended term insurance if they are unable or unwilling to continue the payment of premiums after their policies have been in force for six months. In the case of the important companies selling ordinary insurance these option are available in only one instance after the payment of one annual premium. In the other cases paid-up insurance or extended insurance is not available until the end of the second or third year. These privileges are in no case available to industrial policyholders until after the insurance has been in force for three years.
C. Loans. Savings bank policyholders are entitled to borrow on their policies after the insurance has been in force for one year. This is true in the case of only one important ordinary insurance company. The other important companies do not permit loans until after the insurance has been in force for two or threee years. Industrial policy holders have no loan privileges of any kind.
D. Disability. No disability clauses are contained in any of the savings bank policies. All but one of the important ordinary companies, in consideration of the payment of an extra premium, include provisions in their policies which go into effect in case the policyholder becomes totally and permanently disabled. One company permits the waiver of premiums in case of disability without the payment of an extra premium for the privilege. One company has no provision for premium waiver unaccompanied by the payment of a disability income. Three companies provide for the payment of disability incomes and also for premium waiver. The other companies provide for premium waiver alone. In the case of industrial policies two of the big companies pay half the face value of the policy in case of total and permanent disability, waive the payment of further premiums, and pay the whole face value at death. The third big company pays half the face value in case of what might be regarded as half of total disability, the full face value of the policy in case of total disability, waives payment of further premiums in each case, and pays the face value at death. No extra premiums are required to receive the benefits relating to disability in the case of industrial policies.
E. Double Indemnity. Policyholders with the savings banks and with two of the important ordinary companies cannot obtain provisions in their policies for the payment of double indemnity in case of accidental death. Thirteen of the important companies pay such double indemnity in consideration of an extra premium. The important industrial insurance companies all pay double indemnity without requiring the payment of an extra premium.
F. Assignment. Industrial policyholders do not have the privilege of assigning their interests in their policies to other persons. Such a privilege is enjoyed by policyholders with the savings banks and the ordinary companies.
G. The facility of payment clause which permits insurance companies to pay the benefits of insurance to others than the designate beneficiaries is contained in industrial insurance but not in those issued by the banks or the ordinary companies.
H. Policies Paid-up in Old Age. Policies for straight life insurance, when issued by the savings banks or the ordinary companies, require the payment of premiums until the death of insured. In the case of industrial insurance such policies are regarded as paid-up at age 70 in the case of one company, age 74 in the case of another, and age 75 in the case of a third.
I. It is clear that in the case of dividends, cash surrender, paid-up insurance, extended term insurance, and loans, the savings bank policies are superior to the ordinary policies of the companies, and the latter are superior to industrial policies. In the case of assignment and of payment of insurance to a designated beneficiary, policies issued by the savings banks and the ordinary companies are equally superior to industrial policies. In the case of disability and double indemnity provisions, industrial policyholders are better off than those of the ordinary companies, and the latter's policyholders are better off than those of the savings banks, who cannot obtain disability or double indemnity provisions, even if they pay an extra premium. Industrial policyholders have a further advantage over policyholders of both the savings banks and the ordinary companies in that industrial straight life insurance is generally regarded as fully paid-up at age 70 or several years thereafter. On the whole, it seems fair to conclude that privileges granted to policyholders of savings banks are greater than those possessed by the holders of ordinary policies with companies, and that the holders of industrial policies are at the greatest disadvantage.
7. Does insurance fulfill its purpose?
A. The experience of the period 1923-1932 indicates that while about one-fifth of all the ordinary insurance terminated during the period was terminated by death, maturity, disability, or expiry, terminations which may be regarded as fulfilling rather completely the ends intended by the policyholders when the policies were first bought, only about 10 per cent of the industrial insurance was terminated by such methods. In other words, ordinary insurance was twice as likely to fulfill its purpose as was industrial insurance.
B. While there was only a slight decline in the amount of insurance terminated by methods which might be regarded as completely fulfilling the purpose of insurance in the case of ordinary policies during the depression, there was a considerable decline in the proportion of industrial insurance so terminated during this period.
C. During the ten year period 1923-1932, 32.3 per cent of all ordinary insurance terminated was lapsed. In the case of industrial insurance the amount terminated by lapse during this period was 69.4 per cent. In the year 1933 the ratios of insurance policies lapsed to new policies written were 40.85 per cent in the case of ordinary insurance, 88.89 per cent for industrial insurance and 2.62 per cent for savings bank insurance. An insurance policy lapsed is one upon which the insured has suffered more loss than in the case of a policy terminated in any other way. The only gain to the insured in the case of lapses is the fact that during the period while the policy has been in force he has received the protection of the insurance.
D. The most important reason for the relatively high lapse ratios in the case of industrial insurance and the very low ones in the case of savings bank insurance is the fact that the agency system promotes overselling in the first instance and the absence of any agency system prevents it, in the second instance.
E. During the ten year period 1923-1932, 21.3 per cent of all ordinary insurance was terminated by surrender. The ratio was 17.4 per cent in the case of all industrial insurance terminated during the period. In the year 1932 the ratios between the amount of insurance terminated by cash surrender and the amount of new insurance written was 57.1 per cent for ordinary insurance, 34.9 per cent for industrial insurance, and 33.0 per cent for savings bank insurance. A policy which is surrendered for cash fails to fulfill completely the purpose in the mind of the policyholder when the insurance was bought. The policyholder, however, is better off when he gets a cash surrender value for his policy than he is when the policy is lapsed. In both cases he has received protection while the policy has been in force, but only in the case of cash surrender does he get any return beyond this protection if the policy is terminated before maturity.
F. Cash surrender ratios are relatively high in the case of industrial insurance because the overselling of insurance makes it difficult for the policyholder to keep his policy in force. Surrender ratios are very low in the case of the savings banks. Though cash values are available at the end of six months, there is no overselling and the usual purchaser of a policy from the savings banks is the kind of person who is likely to continue his insurance.
8. Summary.
A. An increased proportion of the national income has been spent for life insurance even during the years of depression.
B. The total income of the life insurance companies constituted 11.8 per cent of the whole of the national income produced in the year 1932.
C. The total income of the industrial insurance business constituted 6.1 per cent of the total income received as wages and salaries in the year 1932.
D. The wage earner who buys industrial policies pay a much higher price or insurance protection than does the ordinary policyholder, and the latter pays much more for his insurance than does the policyholder in the savings banks of Massachusetts.
E. The expense of operation for the industrial insurance companies are proportionately greater than those of the ordinary insurance companies, and the latter's expenses of operation are considerably in excess of those of the savings banks.
F. The principle reason for this difference in relative expenses of operation is the costly system of agencies operated by the companies.
G. In general, the mortality experience of the industrial insurance companies has been more unfavorable than that of the savings banks of Massachusetts.
H. The probable causes of the relatively unfavorable mortality experience of the industrial insurance companies are:
(1) The fact that industrial policyholders do not have to take a medical examination; and
(2) the fact that the agency system promotes the overselling of insurance and the consequent underwriting by the companies of bad insurance risks.
I. A greater proportion of industrial insurance is carried in the form of endowment insurance than is the case with ordinary insurance. The savings banks of Massachusetts have a smaller proportion of the total amount of insurance carried in the form of endowment insurance than either the industrial or the ordinary companies.
J. It is generally undesirable for the wage earners to carry endowment insurance because:
(1) such insurance results in too great a cost for insurance protection and in too low a return on investments;
(2) such a large proportion of insurance policies among industrial policyholders is lapsed that the investment aspect of endowment insurance is likely to be completely eliminated.
K. The provisions of industrial policies are as a rule less advantageous to the policyholders than are those of ordinary policies, and the provisions of ordinary policies are in general not so advantageous to the policyholders as are those of the savings banks.
L. Industrial insurance is much less likely to fulfill the purpose for which it is bought than is ordinary insurance, and the latter is less likely to do so than is insurance bought from the Massachusetts savings banks.
M. The high proportion of lapsed and surrendered policies in the case of industrial and ordinary insurance is probably due to the fact that such insurance is frequently oversold because of the inducements to overselling which accompany the agency system.
N. The industrial insurance business is operated in such a way that it yields comparatively slight advantage to the policyholders as compared with the ordinary companies. The greatest advantages to the policyholders appear to be yielded by the insurance departments of the Massachusetts savings banks.

I.
CASUALTY INSURANCE FOR 1933


Premium Income Paid Out in
or Assessments Claims

Accident & Health - 177 stock companies 62,124,746 38,891,381
" " " - of life insurance cos. 75,149,08142,551,976
Accident & Sick benefits - Mutual
Accident & Sick Benefits Assns. 31,063,190 19,387,354
Totals $168,337,017 $100,830,711

I. Spectator Co. - Year Book, Casualty, Surety & Miscellaneous - pp. XXXIV, XXV, 153.

Note: Accident & Health figures not given for Mutual Casualty Companies, whose total
business, all lines, was approximately 20% of the Stock companies shown.

For this type of business, there is no way of measuring aggregate liability of the
companies; Method, nature and time of payment of benefits vary so widely
that what the public pays for the policies (premium or assessment income) and
what they receive (paid out by companies in claims) is the only measure
of the volume of business--as tabulated in reports.


LIFE INSURANCE
I.
Summary of Results
1.
December, 1929
Number of Policyholders 67,000,000
Insurance in Force $103,146,000,000
Combined Admitted Assets of Companies $ 17,482,000,000
Annual Distribution or Credit to Beneficiaries $ 828,000,000
Annual Distribution to Living Policyholders $ 1,134,000,000
2.
World Totals in Force, 1930 - $155,000,000,000. U.S. & Canada held 75% of the total.
United States, $107,948,278,000. Canada, $7,392,706,000
Un. Kingdom, $ 12,624,879,000. Japan, 4,557,874,000.
3.a.
Cash payments to Living Policyholders & Beneficiaries, 1929 to 1932
Policy Loans $2,049,678,000
Matured Endowments 230,948,000
Surrender Values 1,414,252,000
Dividends 212,583,000
Other Payments 337,882,000
Total to Living Policy holders $4,244,343,000.
Cash Payments or Benefits to Beneficiaries or
Estates 1,924,666,000.
Total Payments over 3 years $6,169,009,000.
4.a.
Cash Income of Companies, 1929 to 1932
Premium Receipts $7,586,082,000.
Interest, Dividends and Rents 2,195,116,000.
Total for 3 years $9,781,198,000.

Cash Residue Remaining, after deducting cash payments to policyholders
and Beneficiaries (other than policy loans--an investment item)
$5,660,867,000.

---------
I. Proceedings of the 26th Convention of The Association of Life Insurance
Presidents.
a. 48 Companies owning 86.4% of the Admitted Assets of all U.S.
legal reserve companies.
1. p. 82
2. p. 73
3. p. 92
4. p. 94




LIFE INSURANCE
TABLE OF AGGREGATES IN FORCE

Explanation of Terms:

Ordinary Insurance: Covers policies for $500 or more (many leading
companies do not sell policies in amounts less than $1,000)
the premiums for which are figured on an annual payment basis,
although they may be paid in semi-annual or quarterly in-
stallments. Premium are customarily collected by mail.

Industrial Insurance: Covers policies for less than $500 (usually), the
premiums for which are calculated on a weekly payment basis
and are collected by agents of the companies personally.

Group Insurance: Covers policies sold to business organizations for the
protection of their employees and for their dependents. The
minimum size of a group--as regulated by state authorities is
usually 50 and to become operative it usually requires the
acceptance of the plan by 75% of the employees of the
organization. This type is all term (or temporary) insurance.

Number of Policies means separate policies issued and in force at the
time - without regard to the number of individuals owning
such policies. Under the group insurance, this refers to the
number of "master policies issued to and held by the organization,
not the certificates held by the individual employees.

Amount of Insurance refers to the face value of all individual policies or
certificates.



Aggregates of Insurance in Force - 1929 to 1932 - by Classes

Ordinary % of Industrial % of Group % of Total %
(1) Total Total Total
1929
No of Policies 31,311,381 25.93 89,414,598 74.04 27,182 00.02 120,753,161 100.00
Amt. of Ins. $76,122,995,805 73.80 $17,901,996,673 17.35 $9,121,447,985 08.85 $103,146,440,473 100.00
(2)
1930
No of Policies 32,738,561 26.79 89,436,438 73.18 37,774 00.03 122,212,773 100.00
Amt. of Ins. $79,774,840,870 73.90 $18,287,408,290 16.94 $9,886,028,572 09.16 $107,948,277,732 100.00
(3)
1931
No of Policies 33,498,958 27.51 88,228,404 72.46 33,174 00.03 121,760,536 100.00
Amt. of Ins. $80,657,119,445 74.08 $18,274,432,216 16.78 $9,954,011,233 09.14 $108,885,562,894 100.00
(4)
1932
No of Policies 32,788,251 28.32 82,944,658 71.65 29,713 00.03 115,762,622 100.00
Amt. of Ins. $73,780,240,425 73.67 $17,265,389,781 17.24 $9,108,742,326 09.09 $100,154,372,532 100.00


I. Spectator Co. Year Books - Life Insurance. 1930, p. 515; 1931, p. 503; 1932, p. A-133; 1933, p. 439
(1) Ordinary - 285 U.S. Companies; Industrial - 68 U.S. Companies; Group - 49 U. S. Companies
(2) " 283 " " " 69 " " " 54 " "
(3) Ordinary 274 U.S. Companies; Industrial - 68 U.S. Companies; Group 56 U. S. Companies
(4) " 260 " " " 68 " " " 53 " "



LIFE INSURANCE

Table of Aggregates - Significant Facts

Concentration of Business within only a small number of companies:

Although there are approximately 328 companies
(1)
writing insurance in one or more of the three classes, The bulk of

business is carried by very few companies. In the Ordinary field, 15

companies have been acquiring an increasing portion of the business, this
(2)
being, in 1932, approximately 75% of the insurance in force. In the
(3)
Group field, 8 companies hold approximately 93% of the insurance in force.

In the Industrial field 3 companies hold approximately 85% of the insurance
(4)
in force. Of the leading companies in both the industrial and group

fields, these same companies, with the exception of 2 of the leading group

companies, are in the list of the 15 leading companies in the ordinary field.

Therefore, only 17 United States companies hold approximately 85% of the

total of all United States legal reserve companies.

Terminations of Insurance by Classes:

Termination of insurance (the insurance which goes

books of the companies for one reason or another) is one of the most

troublesome features of the business. It is also a problem which


1. See Table of Aggregates, footnotes.
2. See accompanying Table of Insurance & Terminations of 15 Companies.
3. " " " " " " " " 8 "
4. " " " " " " " " 3 "



increased by periods of depression, as evidenced by the accompanying
(2) (3) (4) (5)
xxx. Using the results of the leading companies as indicative of

xxx problem as a whole, we see that from 1929 to 1932 there was a

xxx increase in terminations in their relationship to the amount of

insurance in force at the end of each year of the period. Where as,

terminations by death, the chief contingency against which insurance is

purchased, constitute the most important class of terminations in

xxxrmal times, in periods of depression this cause of termination decreases

rapidly in importance. At such times, lapsation and surrender increase
(5)
rapidly, And total terminations become a serious problem both for

the companies and the public. Following the bank closing in March, 1933,

this drain upon the insurance companies reached such totals that the

insurance commissioners of the States declared a moratorium on surrender

and loan clauses of insurance contracts to protect both the companies and

the public.

A four year picture of the termination record of

leading companies for each class of insurance is as follows:

Percent of Terminations to Insurance in Force end of Year:
1929 1930 1931 1932
Ordinary (15 companies) 8.0% 9.2% 10.5% 14.0%
Industrial (3 companies) 14.39% 18.55% 20.01% 26.65%
Group (8 companies) 3.63% 7.07% 9.38% 17.21%

2. See accompanying Table of Insurance & Terminations of 15 Companies.
3. " " " " " " " " 8 "
4. " " " " " " " " 3 "
5. See accompanying Terminations by Classes, 1931 and 1932.

While the policyholders have enjoyed the benefits of its

terminated insurance during the time they carried it, the major portion the benefits,

except death claims, represent lost values to the insured, especially to the extent

that the terminations are from expiring, surrender and lapse. Particularly is this true

of Industrial and Group insurance, as in Industrial policies the benefits, in case of

termination are small until policies have been in force many years; and as Industrial

insurance is term (or temporary) insurance and accumulates no direct monetary benefits

to the insured in case of termination.

Income from Disbursements to Policyholders:

It is significant to not, in this connection, that premium income

has been more than sufficient to meet all payments to policyholders, even through the

unusual pressure that has been experienced in the fours years 1929 to 1932 inclusive.

This shows that, in the aggregate, invested funds have not had to be sacrificed to meet

policyholder demands. This is constructively true except in those cases where other

income has not been sufficient to meet other necessary disbursements.

Examination of the percentages of income and
(6)
disbursements reveals some significant facts. Premium income, both new and renewal,

shows a falling ratio to total income, but it reflects a greater drop in new premium for the

ordinary (which includes group premiums) than for industrial class. From this it is apparent

that buyers of ordinary insurance respond more directly to economic conditions than do

buyers of industrial insurance.


6. See accompanying Table of Income from & Disbursements to Policyholders.
7. The Social Cost of Industrial Insurance, Taylor. Chapter III, p. 38.


From the table on disbursements to policyholders, it is very

important to note the radical changes that occurred, as the period of depression

progressed, in the sources of these payments, as they reflect the realization

by the policyholders, to an increasing degree, of only the incidental and minor

benefits of their policies rather than the primary benefits for the individual

policyholder are particularly small, or entirely absent, because of the terms

of the policies.

The percentages paid to annuitents are not reliable because

of the change in classification which occurred between 1930 and 1931 tabulations.

The dividends paid to policyholders, which includes all

policyholders, not just those who terminated insurance, show a marked decline

during the four years. This is due to reductions in dividend scales by almost

all companies. Dividends are in no sense guaranteed in insurance policies.

LIFE INSURANCE STATISTICS FOR COMPANIES AUTHORIZED
TO WRITE INSURANCE IN NEW YORK STATE
(Bulk of Life Insurance written)

I Total Amount of Life Insurance Outstanding with Companies Authorized to
Write Insurance in New York State. (1) (2)
1909 - - - - - - - - - - - - - - - $14,000,000,000.
1919 - - - - - - - - - - - - - - - 30,000,000,000.
1924 - - - - - - - - - - - - - - - 51,000,000,000.
1929 - - - - - - - - - - - - - - - 85,000,000,000.
1930 - - - - - - - - - - - - - - - 89,193,454,881.
1931 - - - - - - - - - - - - - - - 90,341,324,962.
II Number of Policies in Force.
1930- - - - - - - - - - - - - - - 100,315,985.
1931- - - - - - - - - - - - - - - 100,333,822.
III Number and percentage of Industrial and Ordinary Policies in Force 1931 (3).
Type of Policy Number Percent
Industrial ($500 or less) 74,526,630 74.28
Ordinary ($500 and over) 25,807,192 25.72
Total 100,333,822 100.00
IV Ordinary Policies in Force by Whole Life, Endowment, and All Others in 1931. (4)
Type of Policy Number Percent
Whole Life 17,302,884 67.05
Endowment 6,787,726 26.30
All Others 1,700,734 6.59
Total 25,791,344 99.94
V Number of Whole Life and Endowment Policies in Industrial Insurance as
of 1931 (4).
Type of Policy Number
Endowment 35,637,081
Whole Life 34,811,295
Total 70,448,376
The number of policies insuring against sickness, invalidity and old age is insignificant. "All others" including term and group number only 5,794,866, or about 5% of the over 100,000,000 policies
outstanding in 1931. Annuity policies are negligible. Only 4,622 annuities were paid in 1929 to
citizens of New York State by twenty-five insurance companies (5). From the point of view of
social protection, private insurance in the United States is thus practically confined to life insurance,
that is, to provide for burial expenses and protection of dependents.

(1) Preliminary Text of the Seventy-second Annual Report of the New York
Superintendent of Insurance, March 1931, P.78.
(2) Seventy-third Annual Report of the New York Superintendent of Insurance, Part II, 1932, Table VIII.
(3) Ibid., Table VIII.
(4) Ibid., Table IX.
(5) Report of the New York State Commission on Old Age Security, 1930, P.210.

ORDINARY INSURANCE
(I)
End of Year Insurance in Force - Fifteen Companies
Ordinary Insurance Dominance

1929 (1) 1930 (2) 1931 (3) 1932 (4)
2,264,176,491 2,297,475,633 2,251,589,991 2,091,162,842
xxx Life of N.Y. 5,403,900,621 5,646,733,551 5,631,716,673 5,290,563,283
Hancock Mutual 1,798,407,637 1,887,795,927 1,940,049,023 1,894,236,089
Massachusetts Mutual 1,970,208,405 2,096,730,715 2,158,552,605 2,071,447,713
xxx 8,649,002,429 9,236,568,051 9,848,994,131 9,903,141,559
Benefit 2,435,102,342 2,490,811,762 2,465,136,803 2,334,602,527
xxx Life of N.Y. 4,298,774,546 4,464,278,069 4,450,294,284 4,226,616,174
xxx Mutual 1,202,101,059 1,264,401,948 1,307,691,504 1,279,660,792
xxx Life 7,266,163,476 7,626,719,775 7,657,373,158 7,341,993,220
xxx Mutual 3,913,243,002 4,055,474,187 4,096,140,160 3,998,518,061
xxx Mutual 2,001,558,666 2,105,261,315 2,102,602,371 2,008,947,312
xxx 976,300,705 1,015,616,237 1,029,752,452 998,334,574
xxx 6,316,260,299 6,894,161,263 7,388,675,312 7,357,204,481
xxx 3,294,980,357 3,355,919,931 3,257,563,755 3,022,878,621
xxx 1,604,422,852 1,633,886,185 1,594,279,592 1,419,680,587
Totals $53,394,517,887 $56,121,834,549 $57,180,411,814 $55,238,987,835
xxx force, companies $76,122,995,805 $79,774,840,870 $80,657,119,445 $73,780,240,425
companies, xxx insurance force, all
companies

70.14%

70.35%

70.89%

74.87%
No. of Policies in Force end of year
83.11%
83.50%
83.83%
83.56%
Amount in force, end of year
84.39%
84.90%
85.38%
85.66%

Spectator Company Year Book, Life Insurance
1930 - p (2) 1931 - p (3) 1932 - p (4) 1933 -p. 315-413

TERMINATIONS OF 3 COMPANIES' INDUSTRIAL BUSINESS, 1929-1932

JOHN HANCOCK
No. of Policies 952,485 1,313,689 1,516,8241,924,674
Amt of Insurance $2,33,793,708 $324,818,378 $381,316,749 $482,503,000

PRUDENTIAL
No. of Policies 3,584,334 4,802,015 5,442,272 7,258,693
Amt of Insurance $1,000,790,190 $1,320,883,822 $1,436,151,258 $1,805,256,678

METROPOLITAN
No. of Policies 3,980,736 4,966,021 5,394,4877,014,678
Amt of Insurance $ 939,751,292 $1,235,439,037 $1,305,946,551 $1,654,718,558

Total Terminations)No. 8,518,555 11,081,725 12,353,583 16,198,045
3 Companies ) Amt. $2,174,335,190 $2,881,141,237 $3,123.414.558 $3,942,478,071

Percentage of )
Terminations to Amt. )
of Insurance in Force- ) 14.39% 18.55% 20.01% 26.65%
3 Companies (a)

Spectator Co. Year Books, Life Insurance
(1) 1930 - pp. 504-06 (2) 1931 - pp. 490-92 (3) 1932 - pp. A121-23 (4) 1933 - pp. 428-30
(a) Percentages not given in Spectator








(I.)
COMPARATIVE RECORD OF THREE LARGEST COMPANIES - INSURANCE IN FORCE, DECEMBER 31st

JOHN HANCOCK
1929 (1) 1930(2) 1931(3) 1932 (4)
No. Of Policies
Amount
% of Ternim- ) No.
Ations to in )
force end of ) Amt. year (a)
5,966,672
$1,322,242,932
15.96%

17.68% 6,132,295
$1,383,375,019
21.42%

17.68% 6,099,458
$1,407,739,969
24.86%

27.08%

5,642,586
$1,317,287,382
34.10%

36.62%
PRUDENTIAL
No. Of Policies
Amount
% of Ternim- ) No.
Ations to in )
force end of ) Amt.
year (a) 30,945,387
$7,057,205,168
11.58%

14.18% 31,013,488
$7,321,632,287
15.48%

18.04% 30,946,308
$7,373,021,127
17.58%

19.47%
28,535,140
$6,938,666,574
25.43%

26.01%
METROPOLITAN
No. Of Policies
Amount
% of Ternim- ) No.
ations to in )
force end of ) Amt.
year (a)
TOTALS IN FORCE
3 Companies 37,408,435
$6,729,181,723
10.64%

13.96%

74,320,494
$15,108,629,823 37,534,419
$6,821,768,687
13.23%

18.11%

74,680,202
$15,526,775,993 36,922,407
$6,822,317,171
14.61%

17.67%

73,968,173
$15,603,078,267 35,138,309
$6,535,046,064
19.96%

25.32%

69,316,035
$14,791,000,020

I. Spectator Co. Year Books, Life Insurance
(1) 1930 - pp. 504-06 (2) 1931 - pp. 490-92 (3) 1932 - pp. A121-23(4) 1933 - pp. 428-30
(a) Percentages not given in Spectator









ORDINARY INSURANCE
(I)
Terminations, Fifteen Companies

1929 (1) 1930 (2) 1931 (3) 1932 (4)
284,176,218 315,304,325 349,478,669 387,926,600
xxx Life of N.Y. 465,458,162 579,701,456 674,429,191 823,622,316
Hancock Mutual 152,470,995 190,264,296 221,375,804 286,256,844
Massachusetts Mutual 141,908,455 153,452,439 175,061,215 252,233,615
xxxpolitan 674,146,329 914,252,252 1,089,383,654 1,419,048,079
Benefit 126,210,443 158,222,394 195,460,785 268,599,316
xxx Life of N.Y. 261,929,473 305,820,681 379,284,154 526,196,478
xxx Mutual 58,407,389 73,998,853 94,503,094 138,349,278
xxx York Life 487,947,597 562,234,011 662,328,748 855,985,432
xxxestern Mutual 180,403,687 210,641,433 271,576,987 367,448,430
xxx Mutual 137,596,481 188,450,232 209,819,197 255,822,813
xxxent Mutual 72,667,254 87,494,978 100,268,884 132,317,291
xxxial 692,010,317 820,956,762 930,817,363 1,232,152,347
xxxers 393,907,346 432,521,011 474,627,994 510,931,704
xxx Central 117,681,826 142,602,313 177,290,229 296,358,008
Totals 4,246,921,972 5,135,917,436 6,005,705,968 7,753,248,551
Terminations Total Insurance
force, 15 cos.

8.0%

9.2%

10.5%

14.0%


Spectator Company Year Book, Life Insurance
1930 - p (2) 1931 - p (3) 1932 - p (4) 1933 -p. 315-413














INDUSTRIAL INSURANCE
(I)

(1)
Average Amount of Policies Written in N.Y. State
1904 $140.95
1915 144.74
1928 227.84
(2)
Termination Experience of Companies Operating in N.Y. State

1923 1924 1927
% of Policies Terminated to New Policies Written 51.1 57.4 70.2
% of Amount Terminated to New Policies Written 47.2 52.2 64.
Number of Policies Terminated 4,375,172 7,553,726
Amount of Insurance Terminated $914,714,696 $1,939,028,475
(2)
How Terminated - % of Total Terminations
By death - number of policies 11.6 10.8 8.2
" maturity -" " " 3.7 2.1 1.6
" lapse - " " " 71.3 74.5 70.9
" surrender " " " 10.5 11.6 17.4

By lapse - amount of insurance 74.2 77.2 76.7
" surrender - " " " 8.3 8.9 11.4


I. State of N.Y. Old Age Security. Report of N.Y. Commission, 1930
(1) Table LXIX, p. 191
(2) pp. 192-195











(I)
GROUP INSURANCE

Termination, Right Companies

1929 (1) 1930 (2) 1931 (3) 1932 (4)

65,318,876 149,525,125 82,003,213 226,075,193
Connecticut General 6,635,631 19,355,283 22,615,849 37,396,341
xxxble Life of N.Y. 59,403,705 59,679,480 140,265,313 239,066,588
Hancock Mutual 16,158,187 14,747,415 31,376,906 65,991,875
Metropolitan 71,919,244 161,916,512 221,434,253 379,667,077
xxxri State Life 10,229,258 134,481,168 138,504,942 105,529,822
xxxtial 16,904,543 33,605,928 81,509,578 187,852,305
xxxlers 67,148,922 81,336,202 149,233,857 210,515,218
TOTALS $314,223,371 $654,647,113 $866,993,916 $1,452,094,419

Terminations to
xxxnce in force (a) 3.63% 7.07% 9.38% 17.21%





















End of Year, Insurance In Force, Eight Companies
Group Insurance Dominance

1,525,772,708 1,530,383,143 1,529,242,830 1,366,287,816
Connecticut General 270,066,059 279,657,030 271,656,325 245,366,234
xxxble Life of N.Y. 1,357,021,904 1,472,001,450 1,459,246,180 1,374,534,779
Hancock Mutual 186,898,684 253,141,198 265,091,308 245,054,685
Metropolitan 2,555,416,300 2,702,629,646 2,776,032,647 2,542,555,585
xxxri State Life 363,441,001 400,023,055 344,504,060 307,425,390
xxxtial 939,673,451 1,088,025,745 1,108,940,827 1,009,181,935
xxxlers 1,439,762,113 1,533,202,761 1,485,241,084 1,346,460,342
TOTALS $8,637,992,225 $9,259,064,028 $9,239,955,261 $8,436,866,766

xxx force,
companies $9,121,447,985 $9,886,028,572 $9,954,011,233 $9,108,742,326
companies, to
insurance in
xxx 94.69% 93.65% 92.82% 92.62%


I. Spectator Co. Year Books, Life Insurance
(1) 1930 - p (2) 1931 - p (3) 1932 - p (4) 1933 - p. 432-37
(a) Percentages not given in Spectator

TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry Surrender Lapse
Ordinary Insurance Amount Number Amount Number Amount Number Amount Number Amount Number
Aetna 1929 25,304,571 5,583 2,009,993 1,142 30,077,512 19,367 88,403,641 15,552 123,301,450 32,006
30 26,539,354 5,624 2,042,760 1,218 45,276,327 21,010, 96,704,271 17,086 135,566,678 34,049
31 26,829,422 5,883 1,964,921 1,091 45,565,694 20,929 124,193,143 22,385 137,272,529 31,745
32 29,507,278 6,342 2,088,415 1,232 37,891,534 18,078 159,525,347 31,728 140,505,513 32,812
Equitable of N.Y.
1929 51,985,307 13,628 5,460,240 3,209 81,146,553 23,868 113,069,902 33,408 194,855,057 57,145
30 56,255,911 14,023 6,172,934 3,851 92,625,510 27,451 147,706,917 42,274 255,509,405 72,066
31 60,424,989 15,164 6,862,905 4,196 116,803,947 33,776 201,955,915 55,265 262,737,341 74,598
32 66,270,121 15,327 6,768,568 4,581 148,427,792 43,446 309,741,363 84,785 263,722,524 77,480
John Hancock
1929 14,869,003 7,744 1,661,433 1,394 2,666,681 1,230 41,300,517 27,178 68,843,748 35,179
30 15,287,187 7,884 1,719,179 1,475 3,044,427 1,333 52,188,700 32,259 87,023,390 45,732
31 16,657,870 8,542 1,734,552 1,449 2,968,211 1,457 66,859,171 40,703 92,322,762 51,264
32 18,401,156 8,969 2,118,034 2,149 4,336,277 2,074 94,699,363 60,491 106,448,500 65,769
Massachusetts Mutual
1929 14,440,368 3,691 1,225,227 756 6,569,493 2,025 83,735,730 12,097 31,670,751 7,523
30 17,555,065 3,978 1,593,992 841 9,738,025 2,438 77,079,918 14,379 43,506,951 9,939
31 18,303,326 4,110 1,610,711 807 10,661,151 2,887 93,022,849 16,848 45,899,709 9,784
32 17,594,196 4,203 1,740,102 797 15,441,862 4,276 157,203,842 24,496 51,213,025 10,961





TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry Surrender Lapse
Ordinary Insurance Amount Number Amount Number Amount Number Amount Number Amount Number
Metropolitan 1929 56,340,126 37,643 24,472,701 35,184 12,644,977 2,684 166,099,600 118,257 355,409,923 222,996
30 61,219,006 38,167 26,133,540 36,925 16,101,964 2,859 225,509,397 155,315 494,589,103 30,912
31 66,270,121 41,320 26,699,534 37,161 15,366,415 3,257 319,094,654 211,527 565,785,102 361,917
32 64,156,960 40,109 29,816,067 42,541 22,642,507 6,944 477,363,460 307,844 678,364,809 447,932
Mutual Benefit
1929 22,854,500 5,919 2,838,029 1,417 25,012,357 7,941 54,618,695 12,868 14,312,572 3,966
30 23,164,267 5,758 2,567,592 1,332 29,223,869 8,635 74,545,429 15,988 19,332,400 5,326
31 27,471,722 6,231 3,157,790 1,484 35,180,748 10,089 99,992,824 19,050 17,683,450 5,194
32 25,966,687 6,327 2,852,620 1,450 44,141,596 12,406 153,451,219 28,790 18,513,247 5,452
Mutual Life of N.Y.
1929 45,307,883 13,113 3,952,142 2,329 39,512,287 12,566 98,913,272 22,880 71,324,677 25,220
30 50,144,870 13,110 4,158,153 2,389 38,751,211 12,856 115,298,810 25,373 94,795,864 30,736
31 52,252,081 13,316 6,375,134 2,639 51,073,238 16,084 161,600,349 34,336 107,847,769 34,381
32 52,062,896 13,979 4,681,139 2,762 72,503,133 23,010 287,594,951 60,435 106,986,671 34,354
New England Mutual
1929 9,966,200 2,507 1,543,132 801 5,076,313 1,337 15,650,002 4,399 19,654,610 4,156
30 10,445,394 2,439 1863,304 818 6,525,672 1,572 21,989,719 5,560 23,892,794 4,864
31 12,356,795 2,771 1,653,340 874 8,297,597 1,935 38,703,358 7,567 19,790,955 3,776
32 13,207,681 2,846 1,776,114 927 9,958,637 2,441 60,944,880 12,172 28,166,714 4,981







TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry Surrender Lapse
Ordinary Insurance Amount Number Amount Number Amount Number Amount Number Amount Number
New York Life 1929 59,716,659 20,264 8,867,045 5,996 59,717,716 21,209 112,016,788 41,468 226,616,100 89,231
30 65,592,968 21,272 9,740,374 6,373 70,235,327 24,292 145,850,619 51,570 242,371,300 92,223
31 70,824,717 22,384 10,521,167 7,211 94,791,841 30,487 199,658,407 68,123 250,241,700 100,150
32 71,994,125 22,945 11,228,835 7,688 143,140,837 45,553 324,733,868 112,622 245,354,000 100,737
Northwestern Mutual
1929 38,076,177 9,267 4,508,734 1,977 30,913,534 9,179 52,920,434 13,225 46,715,809 11,903
30 40,523,378 9,699 3,560,671 1,811 37,209,399 10,482 64,070,480 15,265 56,122,106 14,191
31 44,698,910 10,262 3,359,831 1,763 52,352,238 13,621 93,336,279 20,539 64,743,842 15,630
32 44,530,064 10,735 3,549,972 1,602 72,533,607 19,062 158,623,088 33,972 68,967,104 17,416
Penn Mutual
1929 21,423,704 4,687 1,584,,644 840 16,919,393 4,641 48,586,002 9,008 7,758,357 10,048
30 23,293,369 4,833 1,544,997 826 21,029,076 5,358 59,724,978 11,536 70,580,033 17,318
31 24,963,625 5,301 1,847,807 927 23,598,265 6,007 73,330,703 13,966 77,017,709 17,968
32 22,604,575 4,854 1,660,870 786 30,745,888 8,009 112,236,280 19,362 81,296,709 17,526
Provident Mutual
1929 7,596,964 2,127 3,733,876 1,666 2,280,067 562 27,838,520 9,611 23,031,435 5,411
30 9,123,377 2,008 4,070,011 1,808 2,725,599 554 33,829,928 11,461 27,325,901 5,937
31 8,861,889 2,150 3,911,885 1,820 2,657,713 549 44,038,813 13,941 30,429,137 6,250
32 8,786,738 2,084 4,056,717 1,932 2,376,561 482 62,024,634 19,004 40,108,898 7,971







TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry Surrender Lapse
Ordinary Insurance Amount Number Amount Number Amount Number Amount Number Amount Number
Prudential 1929 43,322,718 27,732 10,433,960 11,547 144,805,647 114,074 83,505,278 47,319 400,431,324 220,557
30 50,219,270 30,180 9,414,689 10,865 188,856,134 161,192 123,415,531 63,877 436,042,048 282,008
31 56,166,784 33,481 9,959,877 11,185 242,690,945 232,106 162,752,255 80,547 445,076,844 278,221
32 58,984,053 35,479 9,793,765 10,971 339,898,079 311,820 267,609,998 130,243 532,995,083 360,378
Travelers
1929 24,751,844 5,505 1,948,445 1,039 32,128,684 8,665 155,490,788 30,222 179,486,398 47,385
30 26,109,967 5,837 2,123,945 1,175 38,278,814 9,920 178,646,065 35,989 187,188,209 43,403
31 28,364,899 6,271 2,450,431 1,249 39,794,352 10,357 210,315,333 42,749 193,457,135 42,174
32 26,046,924 6,263 2,718,365 1,480 36,444,262 9,420 267,684,500 54,468 177,847,872 37,074
Union Central
1929 16,059,547 3,710 2,228,819 1,001 10,369,866 3,421 49,755,543 10,214 35,420,259 8,936
30 17,256,824 3,905 2,186,225 937 12,759,937 3,958 62,081,274 12,514 42,973,178 10,090
31 17,020,146 3,677 2,500,963 863 16,108,954 4,994 77,713,081 16,041 56,022,648 13,104
32 18,135,574 4,051 2,031,110 883 23,651,265 7,391 167,166,999 33,650 69,605,678 14,572
Totals, 15 companies
1929 452,015,571 163,120 75,052,420 70,298 507,841,083 232,769 1,191,907,713 407,786 1,828,832,470 718,662
30 492,730,207 168,717 78,892,366 72,644 612,381,291 293,910 1,478,640,036 510,436 2,216,819,360 978,794
31 531,467,296 180,863 84,610,548 74,719 757,911,309 388,515 1,966,569,134 663,588 2,367,328,632 1,046,156
32 560,186,495 184,513 86,880,693 81,781 1,004,133,837 514,412 3,060,603,793 1,014,262 2,610,096,347 1,235,427




TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry Surrender Lapse
Industrial Insurance Amount Number Amount Number Amount Number Amount Number Amount Number
John Hancock 1929 14,153,530 65,829 734,196 28 4,729,497 17,123 45,107,117 203,726 169,069,368 665,179
30 14,359,773 65,842 792,010 24 5,122,724 18,975 72,065,849 326,101 232,478,022 902,747
31 15,177,883 67,886 839,835 16 5,946,781 21,224 95,991,668 435,219 263,360,582 992,479
32 14,560,722 64,873 709,387 6,896 7,729,880 26,603 139,260,283 617,234 320,242,728 1,209,068
Metropolitan
1929 60,310,057 365,408 8,405,143 108,946 3,445,740 28,556 142,954,226 865,286 658,911,104 2,612,540
30 59,898,706 353,348 7,746,221 95,187 3,816,641 30,090 216,559,036 1,366,199 822,548,889 3,121,197
31 61,440,195 353,447 7,367,452 88,136 3,861,977 25,242 317,024,678 1,887,438 820,851,119 3,040,224
32 60,233,583 340,554 7,191,164 84,149 3,944,990 22,986 483,955,605 2,886,502 1,020,453,877 3,680,487
Prudential
1929 58,758,854 287,225 2,244,993 18,447 70,273,303 120,081 164,307,437 902,961 705,158,021 2,256,610
30 58,987,196 278,732 3,124,019 23,937 66,329,076 120,217 261,215,835 1,376,133 931,004,170 3,002,996
31 58,669,959 271,562 3,270,768 23,444 66,940,486 134,849 354,511,432 1,745,449 952,693,992 3,266,968
32 57,769,203 265,424 4,020,374 27,453 66,861,782 150,707 544,931,719 2,442,419 1,131,598,740 4,372,600
Totals, 3 companies
1929 133,222,441 718,462 11,384,332 127,421 78,448,540 165,760 352,368,760 1,971,973 1,533,138,493 5,534,329
30 133,245,675 697,922 11,662,250 119,148 75,268,441 169,282 549,840,720 3,069,433 1,986,031,081 7,026,940
31 135,288,037 692,895 11,478,055 111,596 76,749,244 181,315 767,527,778 4,068,106 2,036,905,693 7,299,671
32 132,563,508 670,851 11,920,925 118,498 78,536,652 200,296 1,168,147,607 5,946,155 2,472,295,345 9,262,245

Average policy proceeds 1929 185
3 companies 30 190
31 195
32 197

TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry, Surrender, Lapse Change Disability
Group Insurance Amount Number Amount Number Amount Number Amount Number
Aetna 1929 10,945,849 - 0 22,539,743 233 30,923,241 - 1,410,043 -
30 10,969,727 73,984,793 324 62,541,090 2,029,51x
31 11,064,104 30,384,371 282 38,275,670 2,27x,073
32 10,399,624 59,053,888 437 154,204,427 2,417,254
Connecticut General
1929 1,608,285 4,811,436 39 215,910
30 1,781,473 17,266,450 48 307,360
31 2,043,873 9,831,824 74 10,218,892 521,260
32 1,803,947 13,228,001 98 21,835,949 528,444
Equitable of N.Y.
1929 10,078,513 47,973,644 118 1,356,548
30 11,047,292 46,813,408 181 1,818,780
31 11,052,580 37,017,549 171 90,127,087 2,068,097
32 11,558,768 78,077,234 311 146,630,016 2,800,570
John Hancock
1929 1,192,454 2,175,700 17 12,633,671 156,362
30 1,584,058 8,868,700 46 4,042,186 252,471
31 1,885,454 6,935,600 3 22,104,419 451,133
32 1,838,212 21,543,966 121 42,028,984 580,713






TERMINATION BY CLASSES

Co. & Year Death Maturity Expiry, Surrender, Lapse Change Disability
Group Insurance Amount Number Amount Number Amount Number Amount Number
Metropolitan 1929 18,608,838 - 0 50,851,503 269 - 2,458,903 -
30 19,731,293 54,275,485 349 87,909,734 3,909,159
31 20,396,218 37,552,889 326 158,873,003 4662,143
32 20,396,218 39,686,368 400 315,087,477 4,863,798
Missouri State
1929 2,329,321 7,443,040 181 456,897
30 2,565,902 131,176,441 264 738,825
31 2,552,903 135,056,516 349 895,523
32 2,216,891 102,579,435 409 733,496
Prudential
1929 6,191,644 9,308,797 98 1,404,107
30 7,325,215 16,015,962 151 8,175,176 2,089,575
31 9,084,551 30,679,186 216 39,451,404 2,294,437
32 8,303,554 46,706,013 349 130,439,391 2,403,347
Travelers
1929 9,817,012 55,648,342 283 22 1,683,568
30 10,225,979 52,591,040 428 16,306,035 25 2,312,148
31 10,356,178 63,415,920 516 72,636,230 6 2,825,529
32 9,458,493 60,894,158 470 137,311,4xx 17 2,851,161

Total 8 companies 1929 68,771,916 200,752,265 1,238 43,555,912 22 9,142,338
30 65,230,939 400,992,281 1,791 178,974,221 25 13,457,831
31 68,435,861 350,874,155 1,937 431,686,705 6 15,997,195
32 65,608,923 421,769,063 2,593 947,537,650 17,178,783
* No Maturities in Group Insurance












































GROUP INSURANCE

Analysis of Group Insurance Claims of One Large Company for One Year,
Ending August 1, 1928 (1)

Of every 100 employees dying in industry under group coverage:
43 had no other insurance

Of the 57 remaining who carried individual policies:
8 had $250 or less
11" over $250, but not more than $500
15" " $500 " " " " $1,000
23" " $1,000

(1) State of N. Y. Old Age Security, Report of N.Y. Commissioner, 1930, p. 205

Importance of Group Life Insurance and Average Size of Policies (II0


Number of Companies reporting use of Group Insurance 618
Total Number of employees of the companies, approximately 1,235,000
Number of employees covered by Group Insurance, approx. 800,000
Total amount of group insurance in force, approx. $1,300,000,000
Types of protection provided, with number of companies:
Death, or death and permanent total disability 537 cases
Sickness and accident only 4 cases
Death, permanent total disability & sickness & accident 77 cases

Average size of policies per employee
For plants employing less than 200 $1,102
" " " over 25,000 $2,229

II. Bureau of Labor Statistics, Bulletin # 491, pp. 456-458












(I)
TERMINATION RECORD BY CLASSES - ALL COMPANIES

Percentages

(4)
1932: Group Ordinary Industrial All Classes

1. By death 4.4 5.9 2.6 4.8
2. By maturity - 0.9 0.2 0.6
3. By expiring 12.2 11.21.4 8.4
4. By surrender 0.1 36.0 21.7 28.8
5. By lapse 21.2 40.0 72.2 47.9
6. By change 61.1 5.1 1.9 9.3
7. By disability 1.0 0.8 - 0.2
Total 100. 100. 100. 100.


(3)
1931: Group Ordinary Industrial All Classes

1. By death 7.5 7.2 3.3 6.1
2. By maturity - 1.1 0.3 0.8
3. By expiring 17.2 10.61.7 8.3
4. By surrender 0.1 28.5 17.2 23.4
5. By lapse 25.8 47.2 75.0 54.2
6. By change 47.7 5.3 2.5 7.1
7. By disability 1.7 0.1 - 0.1
Total 100. 100. 100. 100.

1930)
1929) Above tabulations not given




I. Spectator Year Book
(1) 1930 - p (2) 1931 - p (3) 1932 - p. B-8 (4) 1933 - p. 312








LIFE INSURANCE

Income From & Disbursements to Policyholders

1929 (1) (a) 1930 (2) (a) 1931 (3) 1932 (4)

Aggregate Premium $3,350,367,354 $3,524,326,635 $3,661,105,385 $3,504,255,574 " Paymts to Policy-
holders 1,961,506,657 2,246,776,105 2,606,551,153 3,037,013,687

Ratio of new premium
Income of total premium
Income:
Ordinary Life Companies 14.9% 13.9% 12.6% 10.1%
Industrial " " 7.1% 6.8% 6.8% 6.0%

PAYMENTS TO POLICYHOLDERS
Xxx total payments to policyholders, the following are ratios of individual items:
Ord. Cos 40.51% 38.61% 36.2% 30.7%
Xxx Claims Paid
Indust. 42.39% 37.22% 33.4% 27.2%

Ord. 4.43% 4.19% 3.9% 3.5%
Xxx Endow-
ments Indust. 7.53% 6.30% 5.5% 4.8%

Ord. 4.42%(b) 4.88%(b) 1.4% 1.6%
Xxx to Annuitants
Indust. 4.01%(b) 5.06%(b) 0.6% 0.6%

xxx, Surrendered Ord. 22.87% 25.88% 31.2% 41.7%
Purchased Polic-
icies Indust. 22.77% 29.77% 36.1% 46.6%

Dividends to Policy- Ord. 27.77% 26.44% 23.7%18.9%
holders
Indust. 23.30% 21.65% 20.3% 17.1%

Ord. 3.6% 3.6%
Disability & (b) (c) (b) (c)
xxx Indemnity Indust. 4.1% 3.7%

Total Paid Policy- Ord. 100.0% 100,0% 100.0%100.0%
holders Indus. 100.0% 100.0% 100.0% 100.0%




I. Spectator Co. Year Book, Life Insurance. (1) 1930-p.515; (2) 1931-p. 503; (3) 1932- p. B2-3;
(4) 1933-p. 308-12. (a) Percentages had to be calculated for 1929 & 1930, from figures in
aggregates tables. (b) For 1929 & 1930 this item is "Annuities Paid & Disabilities".
(c) Double Indemnity not segregated 1929 & 1930.

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