The remarkable prosperity of life-assurance business in these
realms--where alone it is a flourishing business--has naturally had
the effect of causing 'offices' to multiply very fast. In the last
eight years, 241 were projected, being at the rate of one for every
twelve days nearly. Two or three bustling persons thereby obtain
situations; there is a show of business for a time; but such concerns
are often exceedingly weak, and the interests of the public are much
imperiled by them. In consequence of an order of parliament, returns
of the accounts of a large proportion of the recent offices have been
made and published; so that the public may now form some opinion of
the stability of these institutions. The general fact resulting is,
that the greater number appear to have been started with small means,
and are not now in hopeful circumstances. The business they have
obtained is generally small in proportion to the expenses incurred; so
that many of them are much behind the point at which they started.
Mr Robert Christie, of Edinburgh, has done the public the good service
of publishing a small pamphlet in which the leading features of the
accounts are presented in an intelligible form.[5] Here it appears
that a life-assurance company will launch into business with an
imposing name, a flourishing prospectus, and--L.3000! After three
years, it will have received L.4000 of premiums. In that time, L.1300
will have been spent in salaries, L.600 in establishing agencies,
L.700 in rent; in all, in expenses of management, upwards of L.5000,
leaving little more than half the premium receipts to stand against
the obligations towards the assured. There is one which has been in
business upwards of four years, and which only possesses L.2869 of
funds, out of which to pay policies represented by L.3094 of premiums,
L.2379 of moneys received for investment, and L.1895 of deposits on
shares. Another, which makes no small bustle in the world, received in
two years and a half L.13,219 of premiums, spent in the same time
L.6993, whereof L.1213 was for advertising, and L.539 for directors
and auditors, and at the end of the period possessed, to make good its
obligations, only L.7045, nearly one-half of which was composed of the
original guarantee fund.
It is very likely that few or none of these establishments were
commenced with a fraudulent design; but they were not required by the
public, and their expenses have eaten them up. By most, if not all of
them, loss and disappointment will be incurred. It is therefore highly
desirable that the public should be warned against new offices
generally. While there are so many old ones of perfectly established
character both in England and Scotland--and we have some pride in
remarking, that there is not one dangerous office known to us in the
latter country--it is quite unnecessary to resort to any other.