vessels, since the proportion of captain-ovned vessels of all 

 vessels with the best loss experience was greater (U7.6 percent) 

 than the proportion of captain-owned vessels of all vessels with 

 the worst loss experience (42.2 percent). Ratios greater than 

 1.00 indicate a relatively favorable loss experience, and ratios 

 smaller than 1.00 mean relatively unfavorable loss experience. 

 The loss experience ratio for protection and indemnity insurance 

 involved the same computations. 



2. Insurance tends to increase hazard . A direct relation- 

 ship was found between the insurance participation ratio and loss 

 experience ratios which verifies the proposition that insurance 

 tends to increase hazard. In the majority of cases, a high pro- 

 pensity to insure was associated with relatively unfavorable loss 

 experience for either or both kinds of insurance, and vice versa . 



For example, in table I9, New England captain-owned vessels 

 had a low (O.63) propensity to carry insurance but relatively 

 favorable loss experience for hull insurance (l.l3) and much 

 more favorable loss experience for protection and indemnity (2.08). 

 In contrast, absentee -owned vessels in New England had a high (2.43) 

 propensity to carry insurance but a relatively \infavorable loss ex- 

 perience for both hull (O.78) and protection and indemnity insurance 

 (0.64). For vessels owned by fish dealers or processors, loss ex- 

 perience for hull insurance was relatively favorable (2.36), notwith- 

 standing their high (6.70) propensity to carry insurance. This dis- 

 crepancy may be explained by the fact that the fish dealer-processor 

 group owns most of the steel vessels, which in New England had a 

 very satisfactory hull insurance loss ratio of only l4.8 (table I8, 

 column 2) . For exactly the opposite reason, their loss experience 

 ratio for protection and indemnity insurance was relatively unfa- 

 vorable (0.21). Eight out of nine steel vessels owned by dealers 

 or processors whose protection and indemnity insurance experience 

 was studied were rated as vessels with worst loss experience (table 

 A-69 in Appendix A). Although the above direct relationship was 

 true for the Gulf Area with the exception of absentee -owned vessels, 

 it was the captain-owned vessels which had high insurance partici- 

 pation and relatively unfavorable loss experience rather than the 

 dealer or processor-owned vessels. This reversal is without doubt 

 due to noninsurance extensively practiced by dealers and processors 

 in the Gulf. 



The reader will be able to find further verification to the 

 previously mentioned proposition in tables 19 to 23. In a few 

 instances, there is no direct relationship between insurance par- 

 ticipation ratio and loss experience ratio because of statistical 

 imperfections and other offsetting factors but on balance the 

 proposition holds. 



9h 



