Expense which is not ascribed to insurance must be
ascribed to investment, and as in comparing any two companies, their two
ratios of one kind or the other must be equated, to decide the question of
economy between them, it may well be left to any company to say what the
fair division of its own expenses is.
Moreover, there can be but little motive to make a false division; for to
successfully compete for business, a company having large investments has
as much need to show a high net rate of interest earned as a low rate of
insurance expense. Again, it is not my purpose to pass judgment on the
economy or extravagance of any ratio of expense shown in the table. It is
not a fact exhibited for the first time by my figures, that the ratios of
some companies are more than double those of others. The same fact would
be displayed in about as high a degree by ratios based on premium income,
or any other incorrect basis. Custom, the balance of opinions, and
competition may well be left to decide what ratios of expense are high,
and what are average, or low. And their decision is to be gathered only
from _statistics_.
What I do claim is that the mode of determining ratios herein explained is
the only intelligible and scientific one, and the only one proper to
employ in _statistical tabulations_ and _investigations_.
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