H.-6.

1936. NEW ZEALAND.

STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1935.

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

State Fire Insurance Office, Wellington, Btli July, 1936. I have the honour to submit the thirty-first annual report of the State Fire Insurance Office, for the year ended 31st December, 1935, with the Revenue Account and Balance-sheet. The following are the comparative figures for the last three years : — 1933. 1934. 1935. Income — £ £ £ Premiums .. .. .. .. .. .. 201,351 200,581 199,898 Other receipts, less land-tax . . . . .. .. 42,906 43,750 39,303 Premium on conversion of securities . . .. .. . . 45 329 Outgo— Bonus rebate to policyholders .. .. .. .. 30,060 41,211 41,233 Claims .. .. .. .. .. 49,005 54,751 53,151 Working-expenses (exclusive of income-tax and Fire Board contributions) .. .. ~ ~ .. 51,340 53,073 53,779 Fire Board contributions.. .. .. .. 7,968 7,940 7,994 Income-tax .. .. ~ .. .. .. 33,912 34,929 23,641 Per Cent. Per Cent. Per Cent. Ratio of claims to premium income .. .. .. 24-34 27-3 26-59 Ratio of working-expenses (exclusive of income-tax and Fire Board contributions) to premium income .. .. 25-5 26-46 26-9 Ratio of Fire Board contributions to premium income .. 3-96 3-96 4-0 Ratio of income-tax to premium income .. .. .. 16-84 17-41 11*83 £ £ £ Carried to reserve for unearned .premiums Surplus, apportioned as follows : — Payment to Treasury under section 5, Finance Act, 1931 (No. 2) 3,484 871 Written ofl Office premises .. .. .. .. 29,700 26,000 27,000 Investment Fluctuation Reserve Fund .. .. .. 15,000 Reserve Fund .. .. .. .. .. .. 3,788 25,601 2,731 Bonus Rebate Reserve .. .. .. .. .. 20,000 .. 30,000 Total .. .. .. .. .. £71,972 £52,472 £59,731 Reserves and funds at 31st December .. .. .. .. £991,087 £1,016,688 £1,049,420 1. Despite extreme competition and an increasing restriction in the sources of insurance business open to the State Fire Office, due to the action of many mortgagees and solicitors requiring borrowers to insure elsewhere, the support given to the State Fire Office continues to be well maintained. While there has been a steady decline in the aggregate of premiums paid to all insurance offices for each year since the peak year of 1930 —the decrease between that year and 1934 being 14-7 per cent. —the percentage of premiums received by the State Fire Office has increased in the same period from 12-75 per cent, to 13-33 per cent, of the total. Comparative figures for 1935 are not yet available, but the indications aie that the relative advance in public support continues. 2. One aspect of competition which it may be permissible to touch upon in this report is that the value of the security behind the policy contract does not always receive proper consideration by the person who is about to insure ; yet security such as a State Fire policy affords is the fundamental purpose of insurance. It is perhaps not recognized as it should be that protective legislation at present does not prevent insurance institutions which may be financially weak from soliciting business on superficially attractive terms.