H.—6

1935. NEW ZEALAND.

STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1934.

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 August, 1935. I have the honour to submit the thirtieth annual report of the State Fire Insurance Office, for the year ended 31st December, 1934, with the Revenue Account and Balance-sheet. The following are the comparative figures for the last three years : — 1932. 1933. 1934. Tnooine " Premiums •■ ■• ..208,493 201,351 200,581 Other receipts, less land-tax _._ 46,749 42,906 43,750 Premium on conversion of securities .. .. • ■ • • • • * d ' g ßmus rebate to policyholders 25,294 30,060 41,211 Claims ■• ■■ •• '•• 70,444 49,005 54,751 Working-expenses (exclusive, of income-tax and Fire Board contributions) 47,967 51,340 53,073 Fire Board contributions 7,835 7,968 7,940 Income-tax 28,201 33 912 34929 Per Cent. -Per Cent. -Per Cent. Ratio of claims to premium income .. .. • • 33-79 24-34 27-3 Ratio of working-expenses (exclusive of income-tax and Fire Board contributions) to premium income .. .. 23-01 25-5 26-46 Ratio of Fire Board contributions to premium income .. 3-76 3-96 3-96 Ratio of income-tax to premium income .. .. .. 13-52 16-84 17-41 £ £ £ Carried to reserve for unearned premiums .. .. .. 15,482 .. ... Surplus, apportioned as follows : — Payment to Treasury under section 5, Finance Act, 1931 (No. 2) 3,484 3, 484 871 Bad Debts Reserve .. .. •• •• •■ i> ooo Written off Office premises .. .. ... •- 38,400 29,700 26,000 Investment Fluctuation Reserve Fund .. .. •• 15,000 15,000 Reserve Fund .. .. 2,134 3 788 25,601 Bonus Rebate Reserve .. .. .. ■■ •• •• AJ,uuu Total .. -. •• •• •• £60,018 £71,972 £52,472 Reserves and funds at 31st December £952,299 £991,087 £1,016,688 1 The accounts for the year show a substantial advance over the previous year in the sum allowed to policyholders by way of rebates. The figures cover the operation for a full twelve months of the substantially increased rebates on dwellings and farm risks which attached as from Ist September 1933. These increases in rebates have had the effect, directly and consequentially, of saving the insuring public as a whole not less than £137,000, which is, of course, additional to the saving of at least £3,000,000 effected through previous State Fire rebates declared since 1923. The aim of the Office, through the application of the rebate-system, is to charge no higher premiums than are necessary to meet losses and working-expenses, plus a reasonable margin for reserves. Concurrently, the Office seeks to give the most liberal policy contracts consistent with U mention that the reserves and funds of the Office now for the first time exceed one million pounds. This has been accumulated at the same time as the public has benefited through reduced rates and rebates, initiated and maintained by the State Fire Office, and after payment of income-tax totalling £341,024. Substantial though the reserves now are, the risk of conflagrations, and the general demand for earthquake insurance at a lower cost, make it essential that there should be no cessation in the process of building up fully adequate reserves to meet all insurance needs. . 3 The new State Fire building, now approaching completion, m the City oi Onristcnurcn represents an investment for some part of the reserve funds of the Office. An application for a building subsidv to the Unemployment Board, such as has been made m connection with other large buildings" recently erected, could no doubt have been justified, but it was decided as a matter of policy to pay for the building out of moneys entirely provided by the State Fire Office without aid of any kind from the general taxpayer. As a consequence, the cost of the building to the Office will be some £6,000 more than if a subsidy had been obtained, ihe new building has been specially designed on the most modern principles to resist both fire and earthquake, and should prove a worthy addition to the public buildings of Chnstchurch. J. H. Jebram, General Manager.