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The total number of cases in which compensation was paid in 1924 was 490,320, and the total amount of the compensation paid was £6,675,038. Beginning with the year 1911, and omitting the years 1915 to 1918 for which the information available is incomplete, the following table shows the number of cases and the amount of the payments in each year up to 1924.
1911 1912 1913 1914
1919 1920 1921 1922 1923 1924
3,293 365,176 368,469 687,477 | 3,929,246 4,616,723
† Includes cases arising from a large colliery explosion.
In 1924 the average payment in case of death was £273, as compared with £222 in 1923 and £161 in 1914; in case of disablement the average payment (including cases settled by payment of a lump sum) was £12 2s., as against £13 14s. in 1923 and £6 7s. in 1914. The average amount paid in lump sums was £69 16s., as against £59 10s. in 1923, and £28 4s. in 1914, while the average amount paid in weekly payments (including weekly payments made prior to settlement by a lump sum) was £9 35., as compared with £11 7s. in 1923, and £4 14s. in 1914.
In 1924 there was an increase over the figure for 1923 in the total number of cases but a decrease in the total amount of compensation paid. The number of cases rose from 480,035 to 490,320, an increase of 10,285 or 2.1 per cent., and the compensation paid fell from £7,134,096 to £6,675,038, a decrease of £459,058 or 6.4 per cent.
Taking the fatal and non-fatal cases separately, the number of fatal cases rose from 2,657 to 2,878, an increase of 221 or 8.3 per cent., and the compensation paid from £591,164 to £786,444, an increase of £195,280 or 33.0 per cent. The non-fatal cases rose from 477,378 to 487,442, an increase of 10,064 or 2.1 per cent., and the amount paid fell from £6,542,932 to £5,888,594, a decrease of £654,338 or 10 per cent.
The large increase in the amount of compensation paid in fatal cases is accounted for by the increased compensation provided by the Act of 1923, referred to on page 4.* Similarly, it would seem that the decrease in the amount of the compensation paid in nonfatal cases must be largely attributable to the lower amount payable in most cases under the Act of 1923, as compared with the amount payable during the operation of the War Addition Acts.
The proportion of compensation paid in the seven industries in fatal cases was 11.8 per cent. of the total amount paid for compensation. The percentages for the different industries work out as follows :-shipping, 34:0; factories, 9.6; docks, 12.5; mines, 10.3; quarries, 16:7; constructional work, 12.7; and railways, 25.1.
Attention was drawn in the last two volumes to the remarkable rise during the last few years in the number of cases and amount of compensation paid in the mining industry. This movement was not continued in 1924, both the cases and the compensation in this industry showing a substantial reduction.
The following tables give the total number of cases, the total compensation paid, and the total number of persons employed, together with the cost of compensation per person employed, in each of the seven industries for the years from 1920 to 1924 inclusive.
Total Number of Cases and Total Compensation Paid.i
* It appears from the returns made by the County Courts in England and Wales for the purposes of Tables 8 and 9 that the total amount of the additional compensation paid in all industries under section 2 of the Act of 1923 in respect of children under the age of 15 was £147,895.
† The Total Compensation paid is shown by the figures in italics. (19213)
Total Number of Persons Employed and Cost of Compensation per Person
It will be seen that there was a decrease in the cost per person employed in every industry except shipping and constructional work.
The rise which has been taking place in the ratio of non-fatal cases to the number of persons employed, was continued in 1924, except in the case of the mining industry. The ratio of fatal cases, as will be seen from the following table, varies very slightly from year to year.
Ratio of Fatal and Non-fatal Cases to Persons employed.
As regards the non-fatal cases of accidents, it would appear from a classification of these cases according to the duration of disablement that the increased rate is due almost entirely to the increase in the rate of accidents lasting less than thirteen weeks, especially those lasting less than four weeks, which constitute (see pages 11 and 12) more than half the total number of accidents. This is shown by the following table which classifies according to duration the number of cases of non-fatal accidents per 1,000 persons employed.
Duration of Non-fatal Accident Cases.
Number of Cases of Accidents terminated within the Year by Weekly Payments per
1,000 Persons employed.
Attention is called to the note as to lump sum cases under the Table on page 11, which applies to this table also.
The figures given above as to total compensation paid in the seven groups of industries, represent only the actual amount paid to workmen or their dependants, and not the total charge on the industries in respect of compensation. To compute the total charge it would be necessary to take account of the administrative expenses and medical and legal costs of employers, insurance companies and mutual indemnity associations, the amounts placed in reserve, and the sums set aside by insurance companies as profits.
In the case of the insurance companies, these have constituted a large proportion of the total charge. For example, it appears from provisional totals of the returns furnished by the companies to the Board of Trade in respect of employers' liability insurance business that for the year 1924 the income of the companies from premiums, after making the necessary adjustments in respect of unexpired risks, was £5,373,454, and from interest and dividends on reserves £147,851, making a total income of £5,521,305. Of this sum, £3,019,854, or 54.69 per cent., was allocated to payment of compensation (including legal and medical expenses incurred in connection with the settlement of claims).
Of the balance £1,867,004, or 33.82 per cent., was spent in payments for commission (9:34 per cent.) and expenses of management (24:48 per cent.), while £546,208, representing 9.89 per cent. of income, was set aside for profits. The remaining £88,239, equal to 1.60 per cent., was added to Additional Reserves. [These figures apply to the whole of the employers' liability insurance business of the companies, and not merely to the seven industries scheduled under the Act.]
It is estimated that if all the charges and expenses referred to above are taken into account, the total charge for compensation in the seven great industries in 1924 cannot have fallen far short of £9,000,000.
It should be noted that in the case of the companies belonging to the Accident Offices Association (which includes almost all the big Accident Insurance Companies) the proportion of income to be allocated to payment of compensation is now subject to the operation of the formal arrangement which was negotiated in 1923 between the Home Office and the Accident Offices Association for the purpose of limiting the charges to employers in respect of employers' liability insurance.* The general effect of this arrangement, which came into operation in 1924, is that the Accident Offices Association engages on behalf of its constituent members to adjust from time to time the rates of premium for this class of insurance in such a way as to make the “loss ratio” (i.e. the proportion which the total amount paid or set aside in respect of claims bears to the premiums) not less than 60 per cent, for each of the years 1924, 1925 and 1926, and not less than 62 per cent. in subsequent years (or such other proportion, not being less than 60 per cent., as may be agreed between the Secretary of State and the Association). The methods for giving effect to this arrangement are laid down in the Directions issued by the Secretary of State in pursuance of the arrangement. Roughly stated, their effect is as follows:-If, on the year's experience, it is found that the “ loss ratio falls short by more than one-half per cent. of the percentage mentioned, policy holders in the companies belonging to the Association are to be allowed a corresponding rebate in connexion with the premium which next falls to be paid. If, on the other hand, the “loss ratio " exceeds the percentage by more than one-half per cent., an adjustment is to be effected by means of an excess charge. The duty of ascertaining the “loss ratio" in accordance with the procedure prescribed in the Directions is imposed on the Auditors of the Association, and for the year 1924, the “loss ratio ” has been certified by the Auditors to be 52.88 per cent., that is to say, the employers insured with the companies belonging to the Association became entitled, on the next renewal of their premiums, to a rebate of 7.12 per cent.
In the coal mining industry the charge arising under the Act, calculated simply on the basis of the compensation paid, works out in 1924 at about 3.0d. per ton of coal raised, as compared with 3.2d. in 1922 and 1923; and taking £161,561,000 as
* “ Undertaking given by the Accident Offices Association on behalf of its constituent Insurance Offices for the purpose of limiting the charges to employers in respect of employers' liability insurance” Cmd. 1891.
† Directions issued by the Secretary of State in pursuance of the undertaking, and Certificate of the Auditors of the Association shewing the effect of the undertaking in respect of the year 1924. Cmd. 2483.