Caution should be exercised in applying these general 

 findings to isolated or individual cases. The loss -experience 

 ratios for the five-year period reflect the general situation in 

 each area. For a few, loss experience vas so severe that they 

 vere forced to withdraw from insuring commercial fishing vessels. 

 Many an insurer reported loss ratios as high as 100 percent or 

 more for three or four consecutive years. The reported loss ratios 

 of a few well established concerns indicate that they had Just 

 broken even during the period under study but loss ratios in 195^ 

 and later years were higher than their break-even ratio. The reason 

 the average loss ratio for the five-year period in New England and 

 Gulf Area has not been higher than is shown in table 11 is due msiinly 

 to the fact that the loss ratios of well established firms with a 

 relatively large volume of business increased not only at a slower 

 pace but later than the loss ratios of both the relatively smal 1 

 and the fly-by-night insurers. 



The loss experience of individual insurers in California is 

 as diverse as in the other areas. The lower loss ratio for the 

 five-year period in this area is partly due to the relatively 

 higher insurance cost (larger premium - smaller coverage, table 9) 

 than elsewhere, but principally due to the very satisfactory loss 

 experience of a leading insurer. 



3. Loss experience of protection and indemnity insurance . 

 Loss experience for the period under study, shown on table 11, 

 averaged 83.9 percent of earned premiums in New England and IU8.8 

 percent in California. No losses occurred in the Gvilf Area in the 

 smaJJ. sample of 39 policy years studied. (As previously noted 

 protection and indemnity insurance was not widely carried in the 

 Gulf.) 



Assuming the escapage of 5 to 10 percent, the loss ratio for 

 the five-year period may have averaged from 89 to 9^ percent in 

 New England and 154 to 159 percent in California. The loss experi- 

 ence is well above the break-even ratio of the most efficient 

 insurer in New England and twice as large as this ratio in 

 California. The unusually high loss ratio in the latter area 

 is not due to relatively large losses but mostly to relatively 

 low insurance cost (small premiiom, etc., table 10). Insurers in 

 the Gulf Area report very satisfactory experience for the small 

 volume of protection and indemnity insurance they underwrite. 



59 



