Cost Accounting in Casualty Insurance

The necessity of some system of cost accounting in casualty insurance catches the attention of all who look even superficially at the accounting and statistical exhibits of organizations in the field of casualty science. No study is necessary to make this need impressive, a quick glance, a bird's-eye view portrays the condition. Let any one take the detailed annual statements of casualty companies entered in the Insurance Commissioners' Convention Edition statement forms, which are uniform for all points that are common to all states, and make a study of them. Take the statements of the various companies as the writer has done for years and analyze them all in the same manner, finding the ragos of expenses not allocated to lines of business to total cash received for premiums for all lines of business, and the ratios of expenses and losses which are given for lines of business separately to the cash received for premiums for the respective lines, and then compare the results for the various companies and see how widely at variance they are. Some variations must be expected, but those shown differ beyond any reconciliation as to a uniform manner of accounting.