Investments for Casualty Companies

Underwriting profits are so meager that the return from the investment of the reserves becomes a question of vital importance. During the past few years it would appear from the published accounts of casualty companies that they have been relying on their investment earnings almost entirely for furnishing stockholders dividends. The news value of this statement is not very great as a similar condition exists in the fire business today. The effect of this condition of affairs on the future policy of insurance companies, however, will probably be far reaching. The progress of those companies who extract an extra 1% on their invested assets will be relatively very much more rapid than that of their competitors. As the business is running today an increase of 1% on invested assets is equivalent to an increase of over 20% dividends.