Group Insurance.—Group insurance has as its purpose the insurance
of the lives of a group of employees under a blanket contract
issued to the employer who becomes responsible for the payment of
premiums although he may arrange for contributions from his
employees. The New York Insurance Department issued its first
approval of a policy of this form in Feb. 1911. On Dec. 31 1920,
according to the Insurance Year Book, there were nearly 19,000
policies and over $1,500,000,000 of insurance in force under this
plan. Although 31 companies had group insurance on their books,
4 of these wrote about 90% of the total business. In its typical form
this insurance is written under a yearly renewable term contract
at a premium rate based on the age-characteristics of the group at
the time of writing the contract and on the desirability of the group
as an insurance risk. The individual amounts payable to the
beneficiaries of the employees are small, varying from $500 each to a
maximum of $5,000. This type of insurance is becoming an accepted
form for large industrial corporations.
Disability Clause.—The disability clause commonly added to the insurance contract provides for the assumption by the life insurance company of the risk that the insured might become totally and permanently disabled. In its most complete form it provides for a waiver of premiums during the period of disability, maintaining the amount of insurance unimpaired, and for the payment of an annuity to the policy-holder. In its early form the clause provided for waiver of premiums alone, but it gradually has been liberalized as experience and the demand for protection have developed. A recent development is a provision to the effect that after a policy-holder has been totally disabled for three months it shall be presumed that he is likewise permanently disabled. Another development in liberality is the practice of granting benefits after death which might have been claimed under this clause by the insured during his lifetime.
Tuberculosis, insanity, and accidents account for the majority of cases of permanent and total disability. Mr. Arthur Hunter in a paper delivered before the Actuarial Society of America presented the following figures covering the experience of the New York Life Insurance Co. from 1910 to 1920:—
| Cause of Disability | Number of Cases |
Per cent of Total Claims | |||||||||||||||
| Tuberculosis |
|
| |||||||||||||||
| Insanity | |||||||||||||||||
| Accident | |||||||||||||||||
| Paralysis of all forms including infantile | |||||||||||||||||
| Cancers and tumours | |||||||||||||||||
| Heart disease | |||||||||||||||||
| Other causes | |||||||||||||||||
| Total |
|
|
Double Indemnity.—The so-called double-indemnity clause which has come into general use in life policies takes two forms: one promising a payment of double the amount of insurance in the event of death from any accidental cause; the other promising double payment if accidental death occurs while the insured is a passenger on a common carrier. A small extra premium is usually charged for this feature. This coverage has developed largely as a selling point and it seems to many to have no logical place in a life-insurance contract.
Mortality Investigations.—In 1916 the Bureau of the Census published an interesting set of mortality tables known as the United States Life Tables, 1910. These were based on the general mortality statistics for the original registration states and showed mortality for males and females, whites and negroes, natives and foreign born, and dwellers in city and country. There were also special tables for the states of Indiana, Massachusetts, Michigan, New Jersey, and New York. The Medico-Actuarial Mortality Investigation was completed and published in 5 volumes. This investigation was undertaken jointly by the Association of Life Insurance Medical Directors and the Actuarial Society of America. To quote Mr. Wendell M. Strong (American Year Book, 1913, p. 369): . . . “The present investigation is of even greater scope than the Specialized Investigation and is participated in by 43 companies of the United States and Canada, including practically all of the important companies of both countries . . . the scope of the investigation will be seen from an enumeration of a few of the subjects and classes investigated, such as weight with reference to height and age, causes of death, over-weights, under-weights, large men, small men, married women, unmarried women, family history of tuberculosis, different classes of miners, different classes of employees in the iron business, and different races.”
It has long been recognized that the American Experience Table of Mortality is not an accurate statement of insurance experience, particularly as to the younger ages. In 1915 the Actuarial Society of America, at the suggestion of the National Convention of Insurance Commissioners, undertook to prepare a new American table. The result of the work, which was participated in by these two organizations and by the American Institute of Actuaries, was issued in the form of two principal tables: the American Men Table, and the Canadian Men Table, of which the former is the more important. These tables are based on the combined experience of 60 leading insurance companies of the United States and Canada. The results show, for ages below 50, a considerably lower mortality than that indicated by the American Experience Table, while mortality rates above 50 are approximately the same.
Governmental Insurance.—Two states have experimented with state-managed life insurance, each contemplating principally the elimination of the agent's commission. The Massachusetts Savings Bank Insurance scheme, which was started in 1907, showed Oct. 31 1919 total insurance in force of $12,374,000. The Wisconsin State Life Fund, which was started in 1912, showed insurance in force Dec. 31 1919 of $404,000. The most important governmental attempt to furnish life insurance during the period was of course the War Risk Insurance Bureau, described under Pension.
Industrial Insurance.—Industrial insurance showed a steady growth during the period, as indicated by the following table from the Insurance Year Book:—
| No. of Companies |
Insurance Written |
Insurance in Force (as of Dec. 31) | ||
| No. of Policies | Amount | |||
| 1910 | 22 | $ 749,717,264 | 23,044,162 | $3,179,489,541 |
| 1915 | 25 | 999,079,322 | 33,370,638 | 4,431,754,866 |
| 1920 | 20 | 1,545,989,192 | 49,178,887 | 7,121,380,255 |
Fraternal Insurance.—The development of fraternal insurance, so far as figures are available, is shown in the next table from the Insurance Year Book:—
| No. of Orders |
Insurance Written |
Insurance in Force (as of Dec. 31) | ||
| No. of Certificates |
Amount | |||
| 1910 | 497 | $1,331,552,713 | 8,558,093 | $9,562,511,910 |
| 1911 | 396 | 1,200,633,063 | 10,122,169 | 9,839,909,282 |
| 1912 | 397 | 1,023,726,087 | 9,963,019 | 9,472,232,473 |
| 1913 | 509 | 1,065,071,108 | 8,058,317 | 9,622,276,590 |
| 1914 | 498 | 1,079,569,596 | 7,868,554 | 9,171,284,227 |
| 1915 | 472 | 922,890,799 | 7,695,944 | 8,694,449,483 |
| 1916 | 523 | 1,155,784,564 | 8,674,996 | 9,162,111,616 |
| 1917 | 533 | 822,041,734 | 7,456,551 | 9,129,974,447 |
| 1918 | 506 | 834,170,063 | 8,021,387 | 8,838,578,765 |
| 1919 | 463 | 1,327,957,612 | 10,380,132 | 9,531,216,614 |
| 1920 | [1]238 | 1,177,970,840 | 8,439,097 | 8,879,451,774 |
An improvement in the conditions of fraternal insurance, most important from the point of view of the insured, was brought about by the Mobile Bill and the New York Conference Bill. The former was the result of a meeting of the National Convention of Insurance Commissioners and representatives of the fraternal organizations held in Mobile, Ala., in Sept. 1910. It was enacted into law or adopted by departmental rulings in many states without material amendments and required the societies gradually to improve their condition under state supervision until they should reach a defined standard of solvency. The latter bill which has since been generally adopted is in the nature of an amendment to the Mobile Bill and is an improvement on it in some respects. Through legislative permission the fraternal societies have also acquired the power to write juvenile insurance.
Fire and Marine Insurance
The development of fire and marine insurance during the years 1910-20 is indicated by the appended table from the Insurance Year Book.
It must be remembered in considering these figures that the 1920 statements do not reflect completely the process of deflation of business, as the figures for 1921 were not available when this article was written.
It is unfortunate that aggregates are not available separately for fire, marine and allied lines of insurance. The figures here given represent all lines written by companies doing primarily fire and marine business.
Fire and Marine Insurance, 1910-20.
| No. of Insuring Organizations |
Net Premiums | Total Income | Paid for Losses | Paid for Expenses | Total Disbursements | |
| 1910 | 624 | $ 267,134,029 | $ 295,644,715 | $125,335,702 | $ 95,466,763 | $256,681,453 |
| 1915 | 659 | 433,995,437 | 474,626,373 | 226,867,125 | 159,568,682 | 416,275,196 |
| 1920 | 926 | 1,020,241,864 | 1,102,788,799 | 461,872,894 | 378,257,920 | 907,245,187 |
- ↑ Orders showing 1920 figures.
