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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.