NEW ZEALAND INSAURANCE COMPANY.

Auckland Star, Volume XL, Issue 35, 10 February 1909, Page 5

NEW ZEALAND INSAURANCE COMPANY.

il !-j. - , ANNUAL MEETING.

THE CHAIRMAN'S STATEMENT.

The general meeting; of shareholders of,, the New Zealand Insurance Co. was 'held this afternoon.-. The chairman,; the Hon. S. Thorne George, presided, and there was a fair, attendance.' The balancesheet, as already, ..printed, was accepted as read. • ■ . -.--,■

- ;The chairman, the Hon.. S. Thorne-; George, in- the .course of;-his remarks,. said: "In submitting the accounts of your company ; for the past year, there is nothing that calls for particular attention, .with the. exception of the under- s writing in the Dominion, and this mat\ ter :!?. will-refer later : "on. ; j

: "The amount of-business for the yearhas been about normal, the premium income amounting to £620,424,; which shows a slight increase : oh; tb.e previous year, Our interest and rents'amount to £26,r 875, giving' a return ■of 3.78 per, cent., which is a shade lower than last year, and is in a measure due to the' expenditure on our new offices at Wellington not yielding any return for ihe year. It should also be borne in ' mind that our San Francisco property has only earned a very moderate return since'the great conflagration. We arc-now taking steps to alter this by erecting a new building thereon. f should here like, to - draw shareholders' attention to the fact that our ■ investments amount-to the sum .of £710,512, which has been only once exceeded in the history ol s the company, in 1905, the year before the San-Fran-cisco calamity/when they were £829,202, less the , purchase money due to the -New Zealand Accident Insurance ; Company, amounting to iIIBiOOO,- leaving net £714,----2- so that we have again reached the strong financial, positionwe'held, at that date. "I would also point out that in 1905 our paid-up capital, reserves and undivided profit were £723,680, wnlist at the present date they amount to £758,----884, being the record in the history of the company. • '-, v••' -. I

■ And now, turning-to the debit .side of ! the account, our expenses are: £159,323, being 1 a somewhat heavy increase on the : previous year. ,To a certain- extent.this •is more apparent than real, as it,is partly, -accounted for by a change in oun system, and we are now debiting certain accident charges to expenses, which were formerly debited to premiums; and they axe also the contributions to the various:.-Fire Boards in the Dominion, "which is entirely a new item comings into, account. The ratio is 25.58 per cent, which, however, is below our average of previous-years. Our losses during the year amount to £409,357, which cum includes all known and unadjusted losses.- The loss ratio to 'premium income is 65.98 per Cent, , as against • 65.96 per cent of the"; previous year, and our surplus on underwriting amounts.to £51,744,,0r B:34jper.cent on our. net premium income. .After allowing for the interim dividend,.amounting to £ 15,000, paid in August last, the available balance' which you have now to deal with amounts to £70,293, from which your directors, recommend the , following' appropriations: £30,000 to'the .Reserve Fund, which . will then amount. to £185,000, and £.15,0bp tp the Reinsurr ance Fund, which will then stand at £250,000, the .-two .funds together amounting to the sum of £435,000. Your directors are . still carrying out what we know to be your wish, viz., the building up of substantial reserves. We also recommend, the transfer of £1500 to the Investment Fluctuation Account, , this ..being 'required for the purpose of meeting the fall in; the prices of bonds and of debentures that are maturing, flow- standing above par. The balance of £23,793 is available, out of which your directors recommend "the payment of a.dividend of 2/- per share, amounting to £15,000, being equal (with the interim dividend) , to 10 jfer cent for .the year. \-,; , /_..- ;'.,.,.„ .4 • And, now, as to .our underwriting in the Dominion — our year!s operations have resulted in a. loss, which, I believe, has been the experience of all other fire companies doing, business in New'Zea-. land. This has been caused by the exceedingly low rates, which have been ruling, together with the heavy .expense which is. entailed, upon : companies l through the contributions under the Fire Brigade Act. The condition of fire underwriting in the Dominion gives cause for grave consideration. It stands to Teaspn that, in , view of the heavy risks we carry, and the conflagration, hazard which is always with us, the rates ought to be put on a. basis which will allow of a proper provision being, made for. such a contingency, and also for a fair profit after paying current lossesr .-.-.- -- f .' ,

Although it does not affect our last year's figures, I may here refer to what has recently transpired as regards bur. Accident business. Shareholders are aware that, owing to the coming into operation of. the Workers'.Compensation Act of', last session, our mining industry :has been passing through a very critical period. The liability of mine-owners has been greatly augmented by the inclusion of certain specified diseases in Clause 10 of the Act, in addition to an increase oi the amount payable for the death of a workman. This liability was so great and indefinite, and the time within which workers could, make their claims so unlimited, that insurance companies refused to coyer the risk without, medical examination. This, as you are aware, the men (unwisely, I think) refused to submit to; and the trouble culminated at the Huntly mines. In the meantime,, the Government had instructed the State Accident Insurance Department to cover the whole risks under the Act without medical examination at an. increased premium of 10 per cent on the present rate of 45/-, making 49/6 per cent and 20/- per cent to cover the risk of pneumoconiosis, or. in all 69/6 per cent, the State guaranteeing the Accident Department against loss. The result of this was that mine-owners, who were not prepared to carry the risks themselves, were-forced in a great many instances to take their business from thie private companies, and to obtain, the necessary- cover with: the State Department. In our opinion, the State has thus, by their guarantee, taken an unfair advantage over private companies.

~ We are now passing through the jubilee year of the company's existence and at our next annual meeting your directors hope to mark in some ■ special manner the completion of the company's fiftieth year; -,

Before concluding, I must refer to the loss the company has sustained by the death of two very able officers—Mr. Mac- ! Donald at Buenos Ayres, and Mr. Wilton Brown at Townsville. The thanks of the shareholders are due to the whole of our staff in all centres, for it is to. their, efforts, and energy, end the great mr terest they .take. in .-our company, that we may attribute without -doubt the cause of our successful operations. I .have, the honour; to .move the adtop-' lion lof the report 'and balance-sheet.

_ On the moUpn of the.Hon. S. Thorn*' Geojge,; seconded by Miv Claxk. the an- * !. epO^ -^ 4 were ad £P ted ■without discussion. The Hon. ThorneMaeorjpe end Messrs. L. J. were re-elected as dlrector.s.

.J*? ?°^ l -, T Aome-eeorge,-in thanking the shareholders said he thought a wonderful thing had been done by the company in recovering its position so coon after the terrible catastrophe at Sen Francisco, and he beUeved that the time was not. far distant when the company would be in a .-better position than ever! I before, ... , , ." :

Messrs. J. F. Buddie ani A. J. De n - weTe re-elected auditors at a sali ary_ of £ 100 a year each.

; A vote of thanks to' the directors, manager, and staff, concluded the proceedings.