60 FIRE INSURANCE DURING THE WAR
it applies only to houses, shops and buildings and the property
therein, leaving the owners of goods ‘in the open’ without
remedy; in addition there may, in the opinion of some
authorities, be damage done in the course of a common law
riot for which the Local Authorities would not be liable, because
the class of injury to which the Act relates is that caused by
persons riotously and tumultuously assembled together. It is
easy to imagine a state of affairs which satisfies the common
law definition of riot, but from which the element of tumult is
antirely absent.
Those engaged in the business of Fire insurance were disposed
on their side to examine the conditions in which the require-
ments of the public could be met. The problem was not entirely
a new one because minor disturbances prior to the war—the
Suffragist agitation for instance—had indicated that in certain
circumstances a desire for such protection did arise. It has
been already explained that the-chief objection to the under-
taking of such risks had been the difficulty of estimating the
extent of the probable loss in any one ‘riot’, and in the days
when reserve funds were relatively small this element of uncer-
tainty was a potent deterrent, and rightly so.
Fortunately the men who had controlled and directed the
business of Fire insurance for many years past had been
actuated by a desire to build not for a day, but for all time.
The profits derived from the years of prosperity had not been
dissipated by the payment of sensational dividends to share-
holders, but had been carefully conserved for the purpose of
building up reserves, and this notwithstanding the fact that
antil the year 1909 the State had made no attempt to exercise
special control over the affairs of Fire insurance. The result
of this wise and far-sighted self-restraint was that when the
Assurance Companies Act of 1909 came into operation the
leading Companies had formulated as their ideals :
(1) A Reserve Fund approximate to 100 per cent. of the
annual premium income,
(2) Dividends to be limited to the amount derived from the
interest on the Reserve Fund.
