H.— 6.

1932. NEW ZEALAND.

STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1931.

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

State Fire Insurance Office, Wellington, Ist September, 1932. I have the honour to submit the twenty-seventh annual report of the State Fire Insurance Office for the year ended 31st December, 1931, with the Revenue Account and Balance-sheet. The following are the comparative figures for the last three years : — 1929. 1930. 1931. Income — £ £ £ Premiums .. .. .. .. .. .. 217,990 221,909 216,007 Other receipts, less land-tax and bad debts. . .. .. 41,003 49,508 49,496 Profit on realization of investments . . . . . . . . 794 Outgo — Bonus rebate to policyholders .. .. .. .. 27,208 27,001 26,187 Claims.. .. .. .. .. .. .. 75,316 90,001 112,' 932 Working-expenses (exclusive of income-tax and Fire Board contributions) .. .. .. .. .. 52,194 52,624 50,479 Fire Board contributions. . .. .. .. .. 7,709 8,027 7,927 Income-tax .. .. .. .. .. .. 15,746 21,153 26,'152 Cash stolen or burnt, Hawke's Bay earthquake .. .... .. 26 Per Cent. Per Cent. Per Cent. Ratio of claims to premium income . . . . . . 34-55 4-0 '56 52 • 28 Ratio of working-expenses (exclusive of income-tax and Fire Board contributions) to premium income .. .. 23-94 23-71 23-38 Ratio of Fire Board contributions to premium income .. 3-54 3-62 3-67 Ratio of income-tax to premium income .. .. .. 7-22 9-53 12-11 £ £ £ Carried to reserve for unearned premiums .. .. .. 2,542 1,567 Surplus, apportioned as follows : — £ £ £ Payment to Treasury under section 5, Finance Act, 1931 (No. 2) .. .. 2,612 Bad Debts Reserve .. . . . . .. . . .. .. 500 Written off Office premises .. .. .. 4,000 5,000 10,000 Investment Fluctuation Reserve Fund .. . . .. 6,000 6,000 7,000 Reserve Fund .. .. .. .. .. .. 57,276 45,336 21,687 Reinsurance Reserve Fund .. .. .. .. 10,000 15,000 Bonus Rebate Reserve .. . . . . .. .. 1,000 500 Total .. .. .. .. .. £78,276 £71,836 £41,799 Reserves and funds at 31st December .. .. .. .. £821,090 £889,494 £918,682 The published accounts of most insurance companies for the period under review show a severe contraction of income, due to prevailing economic conditions, and the consequential fall in premiums payable to the State Fire Office is no more than was to be expected. The application of reduced rates because of improved fire-fighting conditions in areas in which the Department has considerable business also contributed to the reduction shown. The surplus of £39,187 (after paying to the Treasury the 10 per cent, reduction in salaries under section sof the Finance Act, 1931 (No. 2)), was derived from income from investments, there being a loss in the underwriting account of £7,695. This was entirely due to the decision to make ex gratia payments to policyholders whose property was destroyed by fire resulting from the Hawke's Bay earthquake, but who had no legal claim against the Office. That the Office is able to show a surplus under the extraordinary circumstances affords justification of the prudent policy steadily pursued for many years past of building up reserves out of profits.