1903-4.) . -. THE PRINCIPLES OF INSURANCE. 73 
THE PRINCIPLES OF INSURANCE, WITH ESPECIAL REFER- 
ENCE TO SICK BENEFIT PROVISION. 
BY ARTHUR HARVEY, F.R.S.C. 
(Read 26th November, 1904). 
WHILE gathering up the statistics of the various provinces of British 
North America, in view of their impending confederation, into a collection 
subsequently published with the permission of government under the title 
of ‘‘The Year Book of Canada,” no feature made more impression on me 
than the astonishing persistence of averages. Even in such details as acci- 
dental deaths, somewhat similar numbers were shown to be killed each 
year by trees falling on them, poisoned by toxic berries, or the like events, 
which it seemed might show abnormal figures. This very day I read in 
the morning papers the following news telegram :—Chicago, November 25, 
“Thirteen deaths have resulted from football this season. The casualty 
list is the same as last year.’’ In speaking of this with Sir Alexander, 
then the Hon. Mr. Galt, Minister of Finance, my chief, he added that 
even errors of judgment tended to balance themselves, and that in 
making estimates of probable public revenue and expenditure he had 
several times been astray in particulars, but was usually correct as to totals. 
In estimating probable returns from new or changed taxes, such as revenue 
from law-stamps and stamps upon notes of hand, or such things as the 
results to trade of abolishing interprovincial tariffs, similar experiences 
afterwards befel me too. 
It is upon this principle of the persistence of averages that insurance 
is based, whether fire, life, marine or miscellaneous. 
As on leaving the government service I took charge of the Provincial 
Insurance Company of Canada, fire and marine, which soon involved 
the care of a small life insurance company as well, I can speak of these 
branches from experience as well as theory. 
Of the various kinds of insurance, that which deals with the risk of 
fire, is, I think, the most difficult to regulate aright. The circumstances 
which cause loss are so constantly and rapidly changing that a rate of 
premium which is adequate in one decade may be much astray in the next. 
I once directed the classification of more than fifty thousand risks and the 
losses thereunder, covering a number of years, and found the work was only 
useful in shewing what hazards were improving and what becoming more 
