FRANCIS'S CHRONICLES OF LIFE-ASSURANCE. • THE scientific history of life-assurance, with
accounts of the rise and progress of remarkable offices, is not a new subject, though there is still room for an exact, comprehensive, and popular work. The frauds of life-assurance involve curious examples of patience, personation, and cunning, well contrived and long sustained,— although, morally speaking, wrongdoing has not invariably been on the side of individual insurers. The case of Wainwright, as recorded by Mr. Justice Talfourd in his Memoirs of Charles Lamb, shows the crimes that may be committed by callous men to realize a life policy, even by murders of the most treacherous kind. The mania of joint-stock companies professing to deal with life- assurance or annuities, would afford singular examples of conjoint gambling and gullibility all round ; for it is idle to limit the cheat- ing to the speculators—the speculating publio are as bad as they. Related to the subject are tontines both public and pri- vate; a curious matter, which so far as we know has not been fully and popularly exhibited. Private annuities, and perhaps to some extent a species of insurance on a particular life, were in vogue before the regular practice of life-assurance was established, as well as afterwards ; but this last, at all events, partook of the nature of betting or gambling. Of course, every life_hsured is an individual transaction, but a few individual transactions are not life-assurance. That can only be safely or properly carried on upon a scale sufficiently extensive to subject the insured to the average laws of mortality. Below this, life-assurance becomes a matter of mere accident or gambling; since it is impossible to say with a few individuals, whether they may not all die in a few months, or live to extreme old age. So little is Mr. Francis pos- sessed with a clear conception of the principle of life-assurance, that he not only frequently describes as such what is really betting, but a practice the very reverse, where the so-called insurer pays in the event of a man living. This passage follows an account ascribing life-assurance to the times of the Crusades !—but neither for that view nor for the following representation is authority quoted. "Another mode of assurance was commonly practised, by which any tra- veller departing on a long or dangerous voyage deposited a specific amount in the hands of a money-broker, on condition that if he returned he should receive double or treble the amount he had paid, but in the event of his • Annals, Anecdotes, and Legends: a Chronicle of Life-Assurance. By John Francis, Author of" The History of the Bank of England," he, Published by Long- man and Co.
not returning, the money-broker was to keep the deposit, which was in truth a premium under another name."
The digression into matters that have slender relation to the laws of mortality whether in the shape of annuities or life-assu- rance, but which furnish anecdotes and characters, is perhaps jus- tified by the title of the book—Annals, Anecdotes, and Legends ; a Chronicle of Life-Assurance. In all that regards, we do not say a scientific but a proper perception of the subject, a type of the book is furnished by the passage just quoted, which calls a stake "a premium," and gives no reference for a statement. There are stories that would prove the substantial practice of life and marine assurance to be much older than is generally supposed, if we could believe them; there are stories of a startling kind as regards crime or trick, only the author quotes no authority, while some he admits to be "traditional," or that the authority was not "absolutely reliable in all particulars"; and there are notices of particular money-dealers, already known through Mr. Francis or other retailers of gossip, but so strongly impregnated with the penny-a-lining spirit, that one knows not how much is nature and how much is supplied by the portrait-painter. The tales of the bubbles connected with insurances at various times, especially those which heralded or accompanied the South Sea period, involve curious facts. The exposition of the different kinds of life-assu- rance, with notices of certain offices, and remarks upon the inter- ference of Government, are not so much amiss ; only that if an anecdote, however inopportune or questionable, falls in his way, Mr. Francis cannot resist it. Some of his exposures of Govern- ment in their attempted dealings with the offices and their own management of the science of the value of lives, are useful. The general fact of the mistake in their tables of life-annuities, and their obstinacy, was well known; the following particulars may be new. "From 1809 to 1819 this system continued. The speculators soon found out that the Government charge for a life-annuity afforded a very re- munerative investment, and the insurance-offices made considerable profit by purchasing and reselling them. The Commissioners of Greenwich Hospital also selected many of the most healthy of their pensioners, and bought large annuities on them ; a proceeding productive of as much profit to the Com- missioners as of loss to the State. The mistake made by Government in its calculations was no secret. Actuaries and accountants were well aware of it ; and Mr. Moses Wing wrote to the Chancellor, informing him that the tables on which they were granted were productive of great loss to the re- venue. The ordinary lassitude of Government was displayed in the Chan- cellor's reply5 that it was not expedient to make any alteration, as 'the com- pilation of-new tables would be attended with much difficulty.' Mr. Wing then wrote again, showing that there was a loss of 15 per cent on some, and on others of 20 and 24 per cent; and that on a transfer of 12,000,000/. stock there was a loss of not less than 2,691,200/. ; and from this the Chancellor took refuge in a dignified silence."
After some years the Ministers were badgered into inquiry, and Mr. Finlaison was directed to examine the subject officially. "In 1829, Mr. Finlaison reported to the House; and the tables in con- nexion were certainly the most valuable of the kind then published. Access had been given to every document bearing on the subject. The registries of the tontines, the ages attained by the lives on which annuities had been granted a century previous—the experience of the offices—procured a mass of information which was turned to great advantage. The tables fill fifty folio pages, and show the rates of mortality, the value of annuities on single lives at all ages, among many classes of annuitants, separate and combined ; the sexes being distinguished both in exhibiting the law of mortality and the value of annuities.
"These tables were satisfactory in the evidence they gave of a material improvement in the average duration of life. 1,si forty years so great a change had taken place lathe condition of the people, that the decrease of mortality was from 1 in 40 to 1 in 56. They proved also to demonstration the extraordinary difference between the longevity of men and women ; a circumstance not hitherto known to a certainty, but one which was most important to the granters of annuities. The result of all these calculations was comprised in the fact mentioned, that the public, at the end of thirty- five years, will be burdened with a perpetual annuity of 96,0001., owing to the error so tardily rectified. We shall now see the mode in which these errors were amended.
"There is something very provocative of mirth in the economical move- ments of Government. They had just been obliged to annul tables which had been in operation for twenty years; they had been compelled to acknow- ledge to the House that they had been wasting the public money ; they had employed an actuary for ten years in procuring information on which new tables could be constructed ; and scarcely had these been brought into opera- tion than they found they were again in error. While the new act was pre- paring which was to enable the Government to sell life-annuities and an- nuities for certain terms of years, the tables were shown to a gentleman in the Bank of England, who at once declared that those which were framed for lives above a certain age were too low in price. It was replied, that they were taken from the experience of the assurance-offices, and that they repre- sented the average value of life at that period. 'Yes,' was the reply ; 'but if select lives are brought, what becomes of your average ? '
"The act was passed ; and by the tables which it authorized a man of ninety by paying 100/. would receive for life an annuity of 621. The first payment commenced three months after the purchase ; and if the nominee lived one year and a quarter, the nominator received back all the purchase- money, so that every half-year the annuitant lived after this was pure gain. "The shrewd gentlemen of the Stock Exchance immediately saw and seized the advantage. Agents were employed to seek out in Scotland and elsewhere robust men of ninety years of age, to select none but those who were free from the hard labour which tells on advanced life, and to forward a list of their names. The Marquis of Hertford, of unenviable notoriety, added to his vast wealth by choosing as nominees those who were remarkable for high health ; on two only takin,,a. annuities of 2600/. Wherever a person was found at the age of ninety touched gently by the hand of Time, he was sure to be discovered by the agents of the money-market ; the members of which speculated with but scarcely penned their wealth on the lives of these men on such terms."
Mr. Francis follows up this with illustrative stories; some of which have the appearance of being transposed or metamorphosed from the jest-book. However, the Duke of Wellington seems to have been Prime Minister, and "Mr. Goulburn availed himself of a clause in the act, to cease granting annuities which might, prove unfavourable to Government." As coming up to the capabilities of the subject, or of any solid value whatever, this Chronicle of Life-Assurance cannot bdrecom- mended : but it has a merit in its way. A good deal of penny-a- lining matter referring to former ages is told in a gossipy style, which many people in search of amusement would rather have than a work which gave them the trouble of attending to it. "Annals Anecdotes, and Legends," may be classed among readable books.
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