H.—6A

1939. NEW ZEALAND.

ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1938.

Presented to both Houses of the General Assembly -pursuant to Section 22 of the Government Accident Insurance Act, 1908.

State Fire Insurance Office, Wellington, 31st March, 1939. I have the honour to submit the thirty-eighth annual report of the Government Accident Insurance Office for the year ended 31st December, 1938, together with the Revenue Account and Balance-sheet. The following comparison with the previous two years shows the position briefly : — 1936. 1037. 1938. Income— £ £ £ £ £ £ Premiums from all classes of accident insurance 113,649 147,719 202,279 Interest .. .. .. .. 15,111 15,837 18,082 Profit on realization of securities .. .. 1,012 132 486 129,772 — 163,688 220,847 Outgo — Free-year bonus on personal accident policies 286 269 327 Claims .. .. .. .. .. 76,471 99,502 140,806 Working-expenses (exclusive of income-tax) .. 23,156 30,118 32,994 Carried to reserve for unearned premiums .. 7,941 17,035 31,649 Income-tax .. .. .. .. 6,622 5,417 6,066 114,476 —152,341 — 211,842 Surplus, apportioned as follows :— Investment Fluctuation Reserve .. .. .. .. 9,000 Reinsurance Reserve .. . . .. 10,000 10,000 Reserve Fund .. .. .. .. 5,296 1,347 5 15,296 11,347 9,005 Total .. .. .. 129,772 163,688 220,847 Reserves and funds as at 31st December .. 403,697 432,080 472,734 Ratio of claims (all classes of business) to premium Per Cent. Per Cent. Per Cent. income .. .. .. .. ..67-29 67-36 69-61 Ratio of working-expenses (exclusive of incometax) to premium income .. .. .. 20-37 20-39 16-31 Ratio of underwriting surplus to premium income 5-1 0-54 *1-73 * Deficit. 1. In 1937 the total premium income and also the increase over the previous year constituted records for the Office. Both these records have been broken by the figures for 1938. The increase in premiums for the year was no less than £54,560. 2. The aggregate underwriting results show a deficit of 1-73 per cent., due to loss on the substantial revenue derived from insurance under the provisions of the Motor-vehicles Insurance (Third-party Risks) Act, 1928. Increases in premiums under the above Act have since been authorized by Order in Council. The benefit derivable from the new premiums, however, accrues only from the beginning of the new licensing year, viz., Ist June, 1939 ; thus unpayable results are likely to extend well into the current year. All other branches of accident business provided a margin of profit. The underwriting deficit is more than covered by interest from investments, and the year ended with a surpjus of £9,005 7s. 3. Following the decision of Government that the increased liabilities under the Workers' Compensation Amendment Act, 1936 —referred to in detail in my 1936 report—were, if possible, to be borne by the State Accident Branch without an increase in rates, the Office continues to underwrite