149 



AN EXPERIMENT IN MUTUAL ASSURANCE. 



Mutual assurance against fire and other losses is a frequent 

 subject for discussion, and so long as the expenses and the 

 dividends of the great Insurance Companies account for 

 anytliing from 30 to 50 per cent, of their premium income 

 it seems obvious that if a scheme for mutual assurance could 

 be devised upon lines financially sound, it would be very 

 much in the interests of the insured for them to adopt it. 

 The difficulties in the way of such a scheme are, however, 

 very great, and the various attempts which have been made 

 in this direction have for the most part ended in insolvency, 

 or, where successful, in the absorption of the enterprise in the 

 Tariff Ring. This latter fate recently overtook a company 

 doing a very considerable business on the principle of 

 returning to the insured a proportion of the premiums paid, 

 where no claims had been made. In another case, every 

 person insuring must also be a shareholder, but as the shares 

 taken up do not provide sufficient capital for adequately 

 financing the company, the greater portion of all risks are 

 re-insured on Lloyd's, and there is nothing mutual about 

 this. Again, an Agricultural Co-operative Trading Society- 

 doing considerable business in the Midlands has solved the 

 problem by constituting itself an agent for one of the large 

 Tariff Companies, but such an expedient is only recorded to 

 show that the difficulties in the way of mutual assurance for 

 farmers are very great, and that so far they do not appear 

 successfully to have been overcome in any single case. The 

 difficulty is, of course, one of finance, and as the attempts to 

 form capitalised mutual concerns to deal with agricultural 

 insurance business all over the country can be said to have 

 failed, it may be of interest to describe an experiment now 

 being carried on in North Lincolnshire by which it is hoped to 

 secure to the farmer all the profits of insuiance, whilst giving 

 him, at the same time, adequate security against loss. Though 

 the area covered by this scheme is necessarily limited, there 

 is no limit to the number of areas in which it could be put 

 into operation. 



The association referred to started work about twenty-six 

 years ago as a Glanders Insurance Association, to insure its 

 members against losses from glanders. The outstanding 

 feature of the association was that it had no capital, neither 

 paid-up nor nominal, and that its members paid nothing in 

 the way of annual premiums. Where a loss was incurred, a 

 levy was made upon all members, according to the acreage of 

 their holdings, to compensate the member suffering the loss. 



