Life Insurance Outside the United Kingdom.—Although life insurance owed its early development to the efforts of British companies, the extent to which it is practised in the United States and certain of the British dominions is greater than in the country of origin. In 1924, for example, it was estimated that the average amount of insurance per head of the population was £109 in the United States, £84 in Canada, and £44 in Great Britain. More over, the aggregate funds of the American offices are from three to f our times those of Great Britain. The colossal dimensions of the leading American offices may be gauged from the fact that the Metropolitan Life Insurance Company of New York had (1927) funds of nearly £500,000,00o—the largest aggregate of capital in the world.
Life insurance in the Crown colonies is extending and in India insurance on the lives of natives, both by British and Indian companies, is on an increasing scale.
On the Continent of Europe the practice of life insurance is not so widespread as it is amongst the English-speaking peoples. Sums insured per head vary from about £25 to £30 in Holland and Scandinavia to a few pounds in Germany, France, and Italy, where other forms of thrift are favoured. It is, however, probable that the average amount insured would have been • considerably larger in all of the last mentioned countries had it not been for the currency depreciation caused by the World War.
Life Insurance and the World War.—A large proportion of the policies actually in force on the lives of civilians who joined His Majesty's forces were indisputable, and British insurance offices decided to make no extra charge even in cases where they were entitled to do so. Extras for new insurances ranged from L7 7s. per oo at the outbreak of hostilities to as much as £20 per L I oo per annum, and many offices declined to undertake the risk.
There were three main sources of war loss. Mortality in excess of the pre-war ratio cost the offices about £3,000,000 a year. Excess depreciation of investments—which was partly the result of increased income tax, and partly due (e.g., Russian bonds) to actual default—accounted for approximately £4,000,000 a year. Increased income tax added i5oo,000 a year to the loss. These losses rather more than absorbed the normal profits of the period. The change in the character of life office investments was marked. United States railway bonds, which were largely held before the war, were sold freely, and replaced by war issues, and the holdings of British government securities rose from about 1% to a maximum of 38% of the total funds. The geographical field
for securities has of course been greatly narrowed, the United States and Canada being unsuitable on account of the relatively low yield of investments there, while other portions of the world have had to be avoided on account of the insecure conditions prevailing.
Post-War Developments.—Post-war currency depreciation proved disastrous in many Continental countries. In Germany and Austria it eventually became useless to collect premiums and the efforts of the companies were devoted to converting such assets as remained into forms which would not depreciate in proportion to the currency. After the achievement of stabilization, it was, however, possible to do justice to the older policy-holders under various valorization schemes and to start building up reserves again on a sound foundation.
The recovery of the British offices from the effects of the war has been remarkable. All war losses have been dealt with, and as the companies are actually able to invest, after allowing for income tax, at a higher rate than before the war, and mortality becomes steadily lighter, bonuses are on a higher scale than at any time in life insurance history. Expenses have been brought down nearly to the pre-war level. The temporary withdrawal of the American offices from the United Kingdom has resulted in an increase of business to Canadian and British offices.
The failure of the City Life Assurance Company in 1923 (and of the City Equitable Fire Insurance Company) emphasized the fact that although the Board of Trade might be fully aware that a company was in difficulties, it could take no action of itself, and that it might be difficult in practice to get the policy-holders to do so. To remedy this and other defects in the Act of 1909 a departmental committee was appointed in 1924 and its report resulted in the Insurance Undertakings Bill, already referred to. Group insurance, disability benefit business, and insurance with out medical examination, have all developed rapidly since the war. A policy without medical examination is no longer subject to any special restrictions, and the amount of insurance which companies are prepared to grant on any given life under this plan is increasing. An extension is also taking place in insurances on the lives of women.