SCOTCH LIFE ASSURANCE.—SCOTTISH WIDOWS’ FUND—ITS DIRECTORS.—NORTH BRITISH.—THE FARMER’S FATE.—EDINBURGH LIFE.—LIST OF SCOTTISH COMPANIES.
For more than one century the life assurance companies of England were sufficient for the requirements of Scotland; and, whatever opinion may now be formed of institutions founded on the proprietary principle, yet life assurance would have been still in its infancy without it. And the reason is obvious. It was the great object of these societies to pay the best dividend they could. To do this it was necessary to spread their advantages far and wide, to appoint agents in the remotest parts of the country, to familiarise the public mind with its principles, and to advertise its benefits wherever a village or district was ignorant of them. By 1812, however, a proposal was printed “for establishing in Scotland a general fund for securing provision to widows, sisters, &c., and for insuring capital sums on lives, to be called the ‘Scottish Widows’ Fund and Equitable Assurance Company.’” The northern reader may not be averse to review the early career of his favourite institution.
Its prospectus rivals the mining advertisements of the present day. The society was to be supported by 2 Dukes, 1 Marquis, 6 Earls, 2 Viscounts, 2 Lords, 2 Honourable Gentlemen, and 3 Baronets, as patrons only. It boasted a Viscount as President. There were 4 Vice-presidents, 27 Honorary Directors, 15 Ordinary Directors, and 20 Extraordinary Directors. Its tables were founded on the Northampton observations of Dr. Price, and the presumption of improving money was at 4 per cent. per annum. But though it was ushered in with so brilliant an array of names, it would seem as though they of Scotland were not to be thus tempted. It requires hard work to place a new company on a proper footing, and as dukes, marquises, or peers are not usually hard workers, it took three years before this company could commence its operations; and while the little insignificant-looking prospectus which announced its advent is dated 1812, the society itself, ultimately attended with such brilliant results, was not able to commence its operations till 1815. Its first constitutional meeting was marked by a feature perfectly in keeping with the devotional character of Scottish life; yet it is strange and almost startling to commercial England to read that “the venerable and reverend Dr. Johnston, who presided in a manner beautifully consistent with the exalted piety of his own character and the benevolent design of the institution, opened and consecrated the business by the utterance of solemn prayer.”
The difficulties incidental to mutual assurance beset the new society. For a time its sole capital was 34l. 12s. 6d. The most imminent danger must have been apprehended by its friends; and until a sufficient fund was accumulated, an accidental death might have precipitated its ruin. Its early records prove that great anxiety existed, that various precautions were proposed, and that a natural alarm overshadowed its progress. This fact is an exposition of the chances which assurance companies on the mutual principle must run, and of the dangers to which they are liable during any abnormal or remarkable period, when with no capital subscribed to back them, a plague in the shape of the cholera, or an epidemic like the small-pox, may prove that figures are not facts, and upset the most elaborate calculations or the most undeniable tables.
The difficulties of the first year were surmounted, and insurers came to its support. Year after year it gathered strength, and the following table, giving some idea of its progress for ten years, may not be uninteresting to new companies:—
| 1818. | 1821. | 1824. | 1827. | 1829. | |
| £ | £ | £ | £ | £ | |
| Annual prems. | 2,500 | 5,100 | 13,000 | 22,000 | 27,000 |
| Capital | 3,500 | 15,000 | 50,000 | 95,000 | 130,000 |
| Policies issued | 68,219 | 140,000 | 380,000 | 620,000 | 770,000 |
A comparison was made between the English Equitable and the Scottish Widows’ Fund during the first eleven years of each. In the English Equitable the assurances were only 230,000l.; in the Scottish they amounted to 493,000l. The annual income of the former was but 9500l., of the latter 17,500l. The English Society, at the end of eleven years, possessed an accumulated capital of only 29,000l., while the Scottish boasted one of 72,000l. Such was the success of an institution which could not even commence business for three years after its advent, which began with a capital of 34l. 12s. 6d., and which, by the evidence of its own manager, was doubtful of its continuance for the first year or two of its existence. That the Scottish Widows’ Fund has been serviceable to thousands, and that it has stimulated other companies, is undeniable; but it is equally undeniable that it is a mere trading institution founded on mercantile principles; and though its managers may boast that “it is benevolent in its objects, that it originated in no selfish views, and that it has been the happy medium of diffusing comfort and security,” it must still be borne in mind that such benevolence is scarcely compatible with its interests; and when it is remembered that its meetings were solemnised by prayer, the thought naturally occurs whether revenue or religion prompted the exercises, and whether the quackery of trade was not mixed with the fervour of worship. It is a financial company, governed by its tables, guided by its physician, and ruled by regulations which are and ought to be severely enforced. Such was the first mutual institution of Scotland.
The first proprietary was in 1823, when the North British Fire Company added life assurance to its ordinary business. A company with a capital is often of much service to the cause of life assurance in any place where it is newly introduced. Where a mutual society fears to expend its money, a proprietary company will send its proposals to every journal in the place; and by spreading its doctrines among a remote but intelligent agricultural population—by giving an absolute safety to the insured, by virtue of its capital,—it is often productive of inestimable good. And at this period the notion of insurance was vague and indefinite. In agricultural districts especially, even among the most thoughtful, it was rarely heard of. One story will illustrate this more than a hundred assertions. The agent of the Rock Proprietary Company met in the north of Scotland with an intelligent man who farmed some thousand acres. This estate he delighted to cultivate; and though the period was long before that when science was employed by the agriculturist, he invested all his profits in the estate he rented. With great and proper pride he took the life assurance agent over his land, pointed to his improvements, and boasted his gains.
When they returned to the farm-house, the agent, who saw that if his host died, all that he had done would be for his landlord’s benefit, only said to him, “You must have spent a large sum on this estate.”
“Many thousands,” was his curt reply.