SCOTCH LIFE ASSURANCE.—SCOTTISH WIDOWS’ FUND—ITS DIRECTORS.—NORTH BRITISH.—THE FARMER’S FATE.—EDINBURGH LIFE.—LIST OF SCOTTISH COMPANIES.
For more than one century the life assurance companies of England were sufficient for the requirements of Scotland; and, whatever opinion may now be formed of institutions founded on the proprietary principle, yet life assurance would have been still in its infancy without it. And the reason is obvious. It was the great object of these societies to pay the best dividend they could. To do this it was necessary to spread their advantages far and wide, to appoint agents in the remotest parts of the country, to familiarise the public mind with its principles, and to advertise its benefits wherever a village or district was ignorant of them. By 1812, however, a proposal was printed “for establishing in Scotland a general fund for securing provision to widows, sisters, &c., and for insuring capital sums on lives, to be called the ‘Scottish Widows’ Fund and EquitableAssurance Company.’” The northern reader may not be averse to review the early career of his favourite institution.
Its prospectus rivals the mining advertisements of the present day. The society was to be supported by 2 Dukes, 1 Marquis, 6 Earls, 2 Viscounts, 2 Lords, 2 Honourable Gentlemen, and 3 Baronets, as patrons only. It boasted a Viscount as President. There were 4 Vice-presidents, 27 Honorary Directors, 15 Ordinary Directors, and 20 Extraordinary Directors. Its tables were founded on the Northampton observations of Dr. Price, and the presumption of improving money was at 4 per cent. per annum. But though it was ushered in with so brilliant an array of names, it would seem as though they of Scotland were not to be thus tempted. It requires hard work to place a new company on a proper footing, and as dukes, marquises, or peers are not usually hard workers, it took three years before this company could commence its operations; and while the little insignificant-looking prospectus which announced its advent is dated 1812, the society itself, ultimately attended with such brilliant results, was not able to commence its operations till 1815. Its first constitutional meeting was marked by a feature perfectly in keeping with the devotional character ofScottish life; yet it is strange and almost startling to commercial England to read that “the venerable and reverend Dr. Johnston, who presided in a manner beautifully consistent with the exalted piety of his own character andthe benevolent design of the institution, opened and consecrated the business by the utterance of solemn prayer.”
The difficulties incidental to mutual assurance beset the new society. For a time its sole capital was 34l.12s.6d.The most imminent danger must have been apprehended by its friends; and until a sufficient fund was accumulated, an accidental death might have precipitated its ruin. Its early records prove that great anxiety existed, that various precautions were proposed, and that a natural alarm overshadowed its progress. This fact is an exposition of the chances which assurance companies on the mutual principle must run, and of the dangers to which they are liable during any abnormal or remarkable period, when with no capital subscribed to back them, a plague in the shape of the cholera, or an epidemic like the small-pox, may prove that figures are not facts, and upset the most elaborate calculations or the most undeniable tables.
The difficulties of the first year were surmounted, and insurers came to its support. Year after year itgathered strength, and the following table, giving some idea of its progress for ten years, may not be uninteresting to new companies:—
1818.1821.1824.1827.1829.£££££Annual prems.2,5005,10013,00022,00027,000Capital3,50015,00050,00095,000130,000Policies issued68,219140,000380,000620,000770,000
A comparison was made between the English Equitable and the Scottish Widows’ Fund during the first eleven years of each. In the English Equitable the assurances were only 230,000l.; in the Scottish they amounted to 493,000l.The annual income of the former was but 9500l., of the latter 17,500l.The English Society, at the end of eleven years, possessed an accumulated capital of only 29,000l., while the Scottish boasted one of 72,000l.Such was the success of an institution which could not even commence business for three years after its advent, which began with a capital of 34l.12s.6d., and which, by the evidence of its own manager, was doubtful of its continuance for the first year or two of its existence. That the Scottish Widows’ Fund has been serviceable to thousands, and that it has stimulated other companies, is undeniable; but it is equally undeniable that it is a mere trading institution founded on mercantileprinciples; and though its managers may boast that “it is benevolent in its objects, that it originated in no selfish views, and that it has been the happy medium of diffusing comfort and security,” it must still be borne in mind that such benevolence is scarcely compatible with its interests; and when it is remembered that its meetings were solemnised by prayer, the thought naturally occurs whether revenue or religion prompted the exercises, and whether the quackery of trade was not mixed with the fervour of worship. It is a financial company, governed by its tables, guided by its physician, and ruled by regulations which are and ought to be severely enforced. Such was the first mutual institution of Scotland.
The first proprietary was in 1823, when the North British Fire Company added life assurance to its ordinary business. A company with a capital is often of much service to the cause of life assurance in any place where it is newly introduced. Where a mutual society fears to expend its money, a proprietary company will send its proposals to every journal in the place; and by spreading its doctrines among a remote but intelligent agricultural population—by giving an absolute safety to the insured, by virtue of its capital,—it is often productive of inestimablegood. And at this period the notion of insurance was vague and indefinite. In agricultural districts especially, even among the most thoughtful, it was rarely heard of. One story will illustrate this more than a hundred assertions. The agent of the Rock Proprietary Company met in the north of Scotland with an intelligent man who farmed some thousand acres. This estate he delighted to cultivate; and though the period was long before that when science was employed by the agriculturist, he invested all his profits in the estate he rented. With great and proper pride he took the life assurance agent over his land, pointed to his improvements, and boasted his gains.
When they returned to the farm-house, the agent, who saw that if his host died, all that he had done would be for his landlord’s benefit, only said to him, “You must have spent a large sum on this estate.”
“Many thousands,” was his curt reply.
“And if you die,” was the shrewd retort, “your landlord will receive the benefit, and your wife and daughter be left penniless. Why not insure your life?”
The man rose, strode across the room, and drawing himself up as if to exhibit his huge strength, said, almost in the words of one of Sir Bulwer Lytton’sheroes[33], “Do I look like a man to die of consumption?”
The agent was not daunted—he persevered, explained his meaning, enlisted the kindly feelings of his host, persisted in asking him how much he would leave his family, and at last induced him to listen. They examined his accounts, and found that he could spare about 120l.a year. The village apothecary was almost immediately sent for, the life was accepted, and policies were granted for 3000l.
In less than nine months this man, so full of vigorous health, took cold, neglected the symptoms, and died, leaving only the amount for which he had assured his life to keep his family from want.
There is much in favour of life assurance in this little anecdote, and there is much too in favour of the proprietary system, for a man like this would not have risked his savings with a mutual insurance society.
The Edinburgh Life Assurance followed in 1823, having been originated by the legal bodies in Edinburgh at the same time, and very much upon the same principles, with the Law Life in London. The Scottish Union ensued in 1824, the Aberdeen in 1825, and the Scottish Amicable in 1826.
It is one advantage of all new life companies that they assist in forwarding a principle; and there is another feature in them. In most other speculative societies, their failure produces very painful results. A railway sees its capital spent, and is obliged to make farther calls upon its proprietors. An unsuccessful canal company has only the certainty of having fed and demoralised some thousands of stalwart navigators in exchange for the ruin of its shareholders, while the failure of a mine is the melancholy close of many a bright hope. But it is not so bad with a life assurance company. The insured—except in offices originated with a fraudulent design, such as the West Middlesex—has never yet been deceived by the failure of a policy. To take Scotland as an instance, many of the companies have not been able to maintain their ground; but in no one case has the policy-holder risked his premium or lost his assurance. Thus the Scottish Life, when unable to maintain itself, handed its business to the Mercantile, which then became responsible. When the Mercantile ceased to be an independent company, it transferred its policies to the “Life Association.” The “Scottish Masonic” and the “Bon Accord” business was taken up by the Northern. In no instance, therefore, has any legitimate company failedin its engagements. The public has never been scandalised with tales and traditions of wrong and ruin. Nor has the improvident man been strengthened in his improvidence, by being able to plead losses which others have sustained. The progress of the science in Scotland has been calm and equable. Throughout all her districts, its agents are spreading a knowledge of its benefits. There are enough and to spare of companies; and while giving the following list, it may be remarked, that all the offices which are noticed below as having transferred their business, were fairly and soundly originated. It is highly creditable to Scotland, that directly they found they were not successful, their business was at once handed over to other companies:—
Scottish Widows’ Fund (mutual). This was the first life office in Scotland1815North British (mixed). Commenced fire in1809”””life in1823Edinburgh (mixed). Nine-tenths of the profits allotted to the policies1823Scottish Union (mixed), divides two-thirds of the nett profits every five years1824Standard Life (mixed). Commenced under the title of the Life Insurance Company of Scotland, and took its present name in 18321825Scottish Provincial (mixed). Commenced under the title of the Aberdeen Fire and Life Insurance Office, and took its present name in 1852. In 1840, policies with a right to share in the profits were first issued1825Scottish Amicable (mutual)1826Scottish Equitable (mutual)1831Caledonian (mixed). Originally fire1805””Extended to life1833Five-sixths of the profits allotted to the policies.Northern (mixed). Commenced under the title of the North of Scotland, and took its present name in 1848. Divides 90 per cent. of its profits among the policy-holders1836Scottish Provident (mutual)1837City of Glasgow (mixed). Annual investigations and yearly bonuses. At the end of five years a policy-holder may live out of the limits of Europe without extra premium1838Life Association of Scotland (mixed). Commenced as the Edinburgh and Glasgow, and took its present name about 18411839English and Scottish Law Life (mixed)1839National (mixed). Commenced fire1841”””life1843Four-fifths of the profits allotted to the policies.
Offices that have transferred their Business.
Bon Accord, Life1845Transferred tothe Northernin 1849.Commercial, Life (Head Office in Glasgow)1840Transferred tothe Standardin 1846.East of Scotland, Life (Head Office in Dundee) 1844Transferred tothe Colonialin 1852.Experience, Life1843Transferred tothe Standardin 1850.Friendly, Fire1720Transferred tothe Sunin 1847.Hercules, Fire and Life, Fire1809””Life1832Transferred tothe Scot. Union, life in 1835, and fire in 1849.Mercantile, Life1844Transferred tothe Life Associationin 1850.Scottish Life and Guarantee, Life1844Transferred tothe Mercantilein 1848.Scot. Masonic (originally Freemason’s, Life)1844Transferred tothe Northernin 1848.
Thus, in Scotland one office was established in 1815; five from 1816 to 1825; three from 1826 to 1838; six from 1836 to 1845.
The united incomes of these are not far short of 1,400,000l.; and the assurances now in force amount to about 33,000,000l.
THE END.