The Extent and Character of Investments

Through their enormous investments life-insurance companies to-day exert a powerful influence on the upbuilding of the nation's industrial life. Two hundred and fifty-nine companies, reported in the 1913 Insurance Year Book, possess total admitted assets of $4,658,696,337, and at present this gigantic fund is increasing annually at the rate of about $250,000,000. As stated on page 26, the significance of these large totals becomes apparent when it is stated that they represent the contributions over a long series of years of millions of policy-holders each of whom has contributed his little mite. The companies in other words have been the medium through which a vast aggregation of small sums has been devoted to the furtherance on a large scale of the nation's leading business interests. Of the funds on hand at the close of 1913, $3,903,615,175, or 83.8%, of the total, represented the reserve value of policies; $522,334,468, or 11.2%, surplus to policyholders; $111,373,932, or 2.4%., unpaid dividends; and $121,372,762, or 2.6%., all other liabilities. The character of the investments and the relative importance of each class is indicated by the following table:

Judging from the foregoing table, bonds and real-estate mortgages are by far the most important, representing respectively 40.8%, and 34.7%, (or over three-fourths when combined) of the total assets of the companies. If we add to these the item of premium notes and policy loans we find that three out of the nine classes of assets represent nearly nine-tenths of the total. Referring again to our former discussion of the influence of life-insurance investments as a factor in our industrial development it was noted 2 that the investments of nearly $2,000,000,000 in bonds and stocks will be found fairly well distributed over the principal transportation and other corporate properties of the country and represent a very substantial part of the total funds that have been necessary for their development. The $1,600,000,000 of real-estate mortgages also represent investments in properties located in all parts of the country. Because of such loans, owners of real estate have been enabled to erect buildings or otherwise improve their properties. Not only have large sums been furnished for the development of cities and towns, but for many years the companies have granted loans upon western farming lands, thus enabling the purchase, stocking and cultivation of large areas.