10 BULLETIIsr 186, U. S. DEPAKTMEFT OF AGRICULTURE. 



only recently begun to be considered seriously by these companies, 

 and tliat a niunber of them have adopted a classification of their 

 risks within the last year or two. This is especially true in the better 

 developed rural sections of the country. Three main reasons may be 

 given as to why the mutuals in these sections are adopting a classifica- 

 tion of their risks. First, a demand for a closer approach to justice 

 in the charges collected from the members, it being obviously unfair 

 to apply the same rate of premiums or assessments to highly desirable 

 risks as is applied to the more hazardous ones. To apply the same 

 rate, for example, to a well-constructed stone or brick dwelling with 

 slate or tile roof and provided with proper lightning protection, as is 

 applied to an unrodded wooden barn, involves a very material dis- 

 crimination against the better of the two risks. Secondly, it has been 

 found that expediency as well as justice demands a reasonable classi- 

 fication of farm risks. Without such classification it is possible for a 

 larger company that does classify or rate its risks, by means of a 

 competitive offer, to take away from an all-one-rate local mutual the 

 most desirable risks in its territory. This can be done, of course, 

 oven though the cost of insurance in the local mutual on its one and 

 only class of property be much lower than the average cost on the 

 same property in the larger competing company. Lastly, it has been 

 found that the recognition of. certain loss-resisting features by means 

 of suitable concessions in the classification and rates applied is one 

 of the most practical ways of encouraging the general improvement 

 of the risks within the business territory of the company. A sug- 

 gested classification of farm risks may be found in Department Bulle- 

 tin 530 of the United States Department of Agriculture. 



METHOD AND COST OF GETTING BUSINESS. 



The question of who looks after the matter of soliciting business 

 was answered by 1,141 companies. Three hundred sixteen com- 

 panies stated that business was solicited by the directors only, 182 

 by officers only, and 82 by directors and officers, making a total of 

 680 companies soliciting business only through responsible officials 

 of the organizations. Four hundred two companies reported solici- 

 tation by special agents only; 65 by directors and agents; 31 by 

 officers and agents ; and 16 by directors, officers, and agents. Forty- 

 seven companies reported that no solicitation of business was done 

 by any one, the company relying upon the initiative of those needing 

 protection to apply for membership. Twenty companies returning 

 questionnaires gave no information on the method of getting business. 



Since it is known that in many cases certain directors or officers 

 are specifically designated agents for the solicitation of business it 

 is probable that many companies reported securing business through 



