STATE FIRE INSURANCE OFFICE ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1943

Appendix to the Journals of the House of Representatives, 1944 Session I, H-06

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1944 NEW ZEALAND

STATE FIRE INSURANCE OFFICE ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1943

Presented to both Houses of the General Assembly pursuant to the Provisions of the State Fire Insurance Act, 1908

State Fire Insurance Office, Wellington, 30th March, 1944. I have the honour to submit the thirty-ninth annual report of the State Fire Insurance Office, for the year ended 31st December, 1943, with the Revenue Account and Balance-sheet. The following are the comparative figures for the last three years:— 1941. 1942. 1943. Income — £ £ £ £ £ £ Premiums .. .. .. ..222,458 222,081 225,037 Other receipts, less land-tax .. .. 47,237 58,638 65,982 —269,695 280,719 291,019 Outgo — Bonus rebate to policyholders .. .. 45,587 44,124 47,128 Claims.. .. .. .. .. 28,896 . 34,234 25,018 Working-expenses (exclusive of income-tax and Fire Board contributions) .. .. 56,128 58,232 54,512 Fire Board contributions.. .. .. 13,977 15,618 16,144 Income-tax .. .. .. .. 70,476 75,270 83,788 National and social security tax .. .. 15,276 16,214 18,201 Loss on realization of securities .. .. 246 Carried to reserve for unearned premiums .. 2,102 .. 1,289 232,688 243,692 246,080 Surplus, apportioned as follows : — Written off Office premises .. .. 21,000 20,000 21,000 " Reserve Fund .. . .. .. 16,007 17,027 23,939 Bonus Rebate Reserve Reinsurance Reserve Investments Fluctuation Reserve .. 37,007 37,027 44,939 Total .. .. .. 269,695 280,719 291,019 Reserves and funds at 31st December .. 1,224,244 1,241,271 1,266,500 Per Cent. Per Cent. Per Cent. Ratio of claims to premium income .. .. 12-99 15-41 11-12 Ratio of working-expenses (exclusive of incometax and Fire Board contributions) to premium income .. .. .. .. 25-23 26<22 24-22 Ratio of Fire Board contributions to premium income .. .. .. .. 6-28 7-03 7-18 Ratio of income-tax and national and social security tax to total income .. .. 31-8 32-59 35-04 1. Both the premium income and the total revenue constitute records in the history of the Office. That this progress in business should have been successfully handled under increasingly difficult war conditions is a tribute to the fine spirit and work of the staff generally. 2. The record premium income for 1943 has been achieved on tin average rate which, through reduction in charges to the public, has fallen steadily throughout the history of the Office, and is now the lowest so far reached. The following table of average premium rates charged by the Office indicates the great savings in the cost of insurance gained by those who have insured, with the Office. (The table* commences with the first year of the Government Statistician's published figures and ends with the last): — Average Eate Average Rate per £100 of Cover. per £100 of Cover. s. d. ♦ s, d. 1918 .. .. .. 10 10 1933 .. .. ..86 1923 .. .. .. 10 2 1938 .. .. ..55 1928 .. .. ..9 0 j 1941 .. ..4 8 3. The loss ratio (11-12 per cent.) is the lowest in the history of the Office. Bonuses averaging 20-9 per cent, of premiums were allowed to policyholders, making an aggregate return in claims, and bonuses to policyholders, of 32 per cent. During recent years, fire-loss ratios for the Dominion have declined remarkably, despite the fact that average premium rates have also declined very substantially. The decline has been experienced not only in areas with efficient fire-protection services, but also in the unprotected country districts. It is difficult to account for the whole reason, but periods of high and of low fire loss have in the past appeared to work in cycles, and the cautious underwriter does not feel justified in regarding the present freedom from serious fire losses as likely to be permanent.

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L During the latter part of the year the Fire Rating Schedules of the Office were redrafted with a view to simplifying ratings and applying the underwriting experience of recent years to the mam classes from which the business of the Office is derived. ' , The effect on premiums of the new schedule, plus rebates, will be to give pohcyholders, in addition to all previous reductions, an average reduction on their 1943 premiums of 22 per cent. Some policyholders will get less, others more, than 22 per cent. It will be recognized that the work of re-ratmg risks insured under more than 150,000 policies will be no easy task under wartime conditions, when so many experienced officers are absent on service with the Forces. 5 Daring the year the Office continued to administer the Marine Insurance (War Risks) Emergency Regulations 1942 and the Detention Allowances for Captured Seamen's Fund. Also the General Manager and the Secretary of the Office continued to devote part-time service to the War Damage Commission as Deputy Chairman and Secretary respectively. 6 As this is the last occasion upon which I shall make the annual report, it is a suitable opportunity to express my warm thanks to the Managers and staff of the Office for their able and willing co-operation during the twenty-one years I have been General Manager. From every aspect, I believe there is justification for regarding the Office as a particularly successful example of competitive State enterprise. J. 11. Jeeram, General Manager. Revenue Account of the State Fire Insurance Office for the Year ended 31st December, 1943 £ s. d. £ s - d - Premiums after deduction of reinsurances .. 225,037 9 8 Bonus rebate to policyholders .. .. 47,127 11 9 Other receipts- £ I. d. Losses by fire and earthquake (after deduction of Interest, commission, and rent 68,228 i 8 reinsurances) I 7 sit n in Less land and income tax Income-tax .••.., 10421 182 £38 200 Is. Bd., and national National and social security tax .. .. I and social security tax £7,779 45,979 1 8 Commission ».477 17 o 22,249 1 0 Salaries .. .. •• •• •• «.»17 0 A Contribution to Public Service Superannuation Fund .. .. •• •• ■• 457 19 3 Contribution to Fire Boards under the Fire Brigades Act, 1908 .. •■ ■• 16,144 8 0 Expenses of management — £ s. d. Travelling-expenses .. .. 1,020 611 Printing, stationery, and advertising . . . • • • 875 I A Rent 2,480 19 6 Exchange .. .. • • 44 14 9 Postages, telegrams, cablegrams, and sundry charges .. 4,547 16 10 * 6 8,969 0 2 Office equipment .. .. •• •• 207 11 H Office premises : Depreciation .. .. 5,482 0 0 Reserve for unearned premiums .. •■ 1>289 10 8 202,347 14 5 Office premises : Written off .. .. •■ 21,000 0 0 Amount of fire-insurance funds at end of year .. 23,938 Iβ 3 £247,286 10 ~8 £247,286 10 8 Balance-sheet of the State Fire Insurance Office on the 31st December, 1943 Liabilities £ £ s. d. Assets £ s - d. Capital authorized by the State Fire Government securities _ nt'lll 10 Insurance Act, 1908 .. .. 100,000 Local-authority securities Z w'?22 ?/ Less not raised 100,000 Rural Advances bonds .. •• 14,1/5 0 _. Nil Fixed deposits and at short call .• ■• 110,000 0 O Bad Debts Reserve 1,500 0 0 Land and buildings .. .. •• 216,140 2 3 Reserve Fund 780,963 6 5 Outstanding premiums .. .. 15,124 15 7 Investments Fluctuation Reserve Fund .. 85,000 0 0 Interest accrued but not due .. .. 017919 fi Reserve for unearned premiums .. .. 112,518 14 10 Rent accrued or due •• ■• •■ e,w*n Bonus Rebate Reserve .. .. ■■ 122,578 17 0 Cash in Reserve Bank of New Reinsurance Reserve Fund 140,000 0 0 Zealand at Wellington, or in £ ■•«• Premium and other deposits 2,54112 9 transit to Wellington .. 184,280 111 Outstanding fire and earthquake losses .. 2,499 0 0 Imprest Account balances : Head Government taxes 193,818 19 0 Office and branches .. 3,192 6 1 q Sundry creditors .. .. •■ .. .112,245 18 3 e>• Other amounts owing by the Office — £ s. d. Reinsurance premiums due .. 9,958 10 10 Commission .. •• 2,276 13 3 Printing, stationery, and advertising .. • • 12 8 9 Postages and sundry charges .. 2,363 0 4 Fire-insurance funds, as per Revenue Account .. 23,938 16 3 £1,592,215 17 8 £1,592,21 d 17 8 J. H. Jeeeam, General Manager. ,R. H. Newbold, Deputy General Manager. 31st May, 1944. I hereby certify that the Revenue Account and Balance-sheet have been duly examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— Cyeil G. Collins, Controller and Auditor-General.

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