$141,000,000 in 11 Years 



Farmers Mutual Reinsurance Company Hits Astonishing 

 Pace In Fire, Hail/ Windstorm Field 



y^N JUST 11 years, Farmers Mu- 



iJl tual Reinsurance company has 

 \^^ grown from nothing to a $141,- 

 282,546 fire, hail and windstorm com- 

 pany owned and operated by Illinois 

 farmers. It is the third of a trio of 

 co-operative insurance companies set up 

 for its members by the Illinois Agricul- 

 tural Association. 



Lack of adequate reinsurance facil- 

 ities prior to 1924 had been a handicap 

 to township and county fire and wind- 

 storm companies in Illinois. Even when 

 charter and by-laws permitted writing 

 the maximum amounts of insurance de- 

 sired by an applicant, these local com- 

 panies did not feel safe in retaining 

 such risks. 



In many instances, the local mutual 

 was not able, either by limitation of 

 law or charter, to grant the amount of 

 insurance desired by the applicant. He 

 was forced to divide his insurance in 

 companies other than those on a mutual 

 basis. Because activities of the local 

 company were limited, it was thought 

 the service of township mutuals could 

 be extended if a mutual company were 

 organized to serve the entire State. 



Thus the Illinois Agricultural Asso- 

 ciation, some 12 years ago, called to- 

 gether representative leaders of local 

 farmer-owned fire and windstorm com- 

 panies. Out of the discussions and 

 subsequent study of insurance problems 

 came the formation of Farmers Mutual 

 Reinsurance company. On November 

 21, 1925, it began business with 378 

 policies issued for a total of $770,000 

 of insurance. It was sponsored by local 

 mutuals in the State and the lAA. The 

 lAA advanced money for organization 



expenses and for the cash reserve re- 

 quired by law. 



The company, since its beginning, 

 has had its offices with the lAA and 

 other affiliated companies. Thus it has 

 had the benefit of promotional, legal, 

 financial and administrative assistance 

 from the staff of the State organization. 



At the close of business a little more 

 than 1 1 years after Farmers Mutual was 

 organized, namely September 30, 1936, 

 there had been 41,409 direct fire, 29,- 

 182 direct windstorm and 40, 724 hail 

 policies on crops issued. 



In the beginning, the company issued 

 policies covering only fire and light- 

 ning insurance on farm property. De- 

 mand for other forms of insurance be- 

 came so great that protection against 

 hail damage to crops, windstorm and 

 hail damage to buildings, and fire 

 damage to warehoused corn were ad- 

 ded. 



Farmers Mutual Reinsurance com- 

 pany has consistently reinsured its ma- 



"TOO MANY FIRES!" 

 Manager "Jack" Kelker says it was a hard 

 season, what w!th drought, and lightning crack- 

 ling around. All of which keeps Edith Marsh 

 busy as more and more customers learn they 

 can save up to 30% in Farmers Mutual. 



jor risks to avoid undue fluctuations 

 in losses. Fire coverage above a sound 

 retention basis is reinsured with local 

 mutual companies in this State. Hail 

 coverage on growing crops is reinsured 

 in total with the largest mutual com- 

 pany in the country handling this kind 

 of business. Excess windstorm insur- 

 ance is also reinsured with the same 

 company. Hail and windstorm consti- 

 tute a catastrophe hazard which should 

 be spread as far as possible, and rein- 

 suring these risks enable companies of 

 eight or ten states to pool their cover- 

 age to best advantage. 



Farmers Mutual was organized to 

 save farmers money on fire, windstorm 

 and hail insurance. By actual compar- 

 ison with stock companies, average 

 saving in Farmers Mutual is 30 percent. 

 In dollars and cents, it means $200,000 

 a year. Organized as a legal reserve 

 mutual, it is owned, operated and con- 

 trolled by its policyholders. At the end 

 of August, 1936, surplus owned by 

 these policyholders amounted to $267,- 

 000. 



24 



L A. A. BECORD 



