30   BEST'S INSURANCE REPORTS — FIRE AND MARINE.

ARIZONA FIRE INSURANCE COMPANY,
Walker Building, Phoenix, Ariz.

GENERAL REVIEW.

history.—This company was incorporated under the laws of Arizona June 4, 1910, and began business September 15, 1910, with $200,000 authorized capital, all of which was paid in. In 1917 the paid-in capital was increased to $200,-259.50. The payments to surplus account have been as follows: 1910, $27,035; 1911, $13,049.50; 1912, $98,125; 1913,$14,350.74; 1915, $5,060; 1916, $41,383, and 1917, $2,259.50. Out of the total surplus paid in, only $3,019.52 surplus remained on December 31, 1917, and $4,158.51 at the close of 1918. During 1919 the surplus was increased $41,112.30, making that item at the close of the year $45,270.81. This increase was largely due to the marking up of the book value of its real estate, the company having gained from its investments during the year $67,639.18 as explained below.

This company has advised -us that as of March 8, 1920, the stockholders voted to increase the capitalization by $100,000, issuing the stock on a two for one basis, thus collecting $100:000 for surplus account.

The company has advised us that it purchased at a bar-gain, one-fourth of a block, known as the northwest corner of Second avenue and Adams street, Phoenix, Arizona, for use as a Home Office site, on the advice of the Insurance Department, and that the increase in value as taken in the statement was made at the suggestion and with the full sanction of the Department.

In January, 1917, this company reinsured the business of the Occidental Fire Insurance Company of Albuquerque, New Mexico, that company retiring from business.

On April 16, 1917, it reinsured all its Eastern business in the City Insurance Company of Pittsburgh. On May 24, 1917. it reinsured considerable long term business in the Northern Assurance Company of London.

Management and Reputation.—The company's operations have been very unprofitable. and the surplus has de-creased to the amount shown above, in spite of the fact that large sums have been contributed since beginning business.

Owing to the death of two of the officials, a change in the management took place in December. 1913 Edgar M. Davis, formerly president of the St. Louis Fire Insurance Company of St. Louis, Missouri, now out of business, was elected manager. Mr. Davis, personally is the general agent for Arizona of the California Insurance Company, San Francisco, California, Franklin Fire Insurance Company, Philadelphia, Pa., and the Bankers and Shippers Insurance Company, New York, N. Y.

The company under its former management wrote some "surplus line" business, but now accepts business only through authorized agents in the States in which it is

LIABILITIES, DECEMBER 31, 1919.

regularly licensed. It writes a full volume of business in proportion to its capital and surplus.

On December 31, 1919, the directors owned $63.841, par value, of the capital stock.

Its loss paying record is excellent.

Its expense of operation has been very high and its loss ratio has also been high. The loss ratio in 1918 and 1919, however, was normal.

A communication under date of March 16, 1920, from E. M. Davis, vice-president and general manager of this company, stated in connection with the value of the real estate purchased for Home Office site, the following:

"* * * we secured this property at a bargain figure. In considering its purchase we went into the matter thoroughly with the Insurance Department of this State and they advised us by all means to purchase the property, as it meant a large profit to us. They suggested the increase in value as taken in our statement, on account of the appraisal that was made of the property, and all trans-actions in connection with its purchase and increase in value on our books were made with their full knowledge and sanction."

Mr. Davis subsequently called upon us and made verbal confirmation.

The Insurance Department of Arizona advised us under date of April 6, 1920:

In response to your letter of March 23d, you are advised that the Arizona Fire Insurance Company did not confer with this department, with reference to the purchase of the real estate referred to in your letter and the Commission did not therefore recommend the purchase or suggest the increase in valuation."

Complete details will be furnished upon request.

The mortgage loans consist of first mortgages upon property in Arizona. yielding a good rate of interest.

The bonds owned are of good character.

Affiliations—Western Insurance Bureau, Board of Fire Underwriters of the Pacific, Pacific Coast Automobile Underwriters Conference.

Classes of Business Written.— Fire, automobile and tornado insurance.

Territory.—It is licensed in Ariz., Cal., Ill , Ind.. Mich. and Ohio.

Dividends.— None.

Officers.—President, C. M. Scott; vice-president, Epes Randolph; vice-president and general manager, E. M. Davis; treasurer. Max Meadors; secretary, A. H. Matthew.

Directors.— (At last advices.)

Babbitt, David, Babbitt Brothers. Flagstaff, Ariz. Asbury, H. W, manager Crystal Ice and Storage Co.. Phoenix, Ariz.