N.Z. INSURANCE CO.

Auckland Star, Volume LXVII, Issue 183, 4 August 1936, Page 10

N.Z. INSURANCE CO.

AFTER 77 YEARS.

PAST YEAR UNDER REVIEW

"POSITION NEVER STRONGER.'

Progress in all departments was outlined to-day at the annual meeting of shareholders in the New Zealand Insurance Company, which on May 31 completed 77 years in business. The chairman of directors, Sir James Gunson, said the year had passed without any incident in the company's business calling for special emphasis. While thev had not had to contend with any major casualty, yet competition had become increasingly keen and difficult at all points. Nevertheless, the directors were able to report a material improvement in the underwriting profit, which at £05,347 4/10 was £15,270 10/ greater than that of last year/ The improvement was attributable to the fact that all fields of operation had shown uniformly better results. The disturbed conditions of the world's trade and the unsettled international relationships, whicli still continue, created problems that make it difficult to produce steady annual returns. When consideration is given to the fact that the major portion of the company's premium revenue was derived outside of New Zealand, it would be realised how dependent the company was upon the profitable operation of its business in territories overseas. Premium Income. A tendency for rates to decline being apparent in every country where the company operated, the increase in premium revenue from £1,050,791 to £1,096,569 was gratifying, and bore testimony to the zeal and capacity of the whole of the company's staff. The increase of £46.000 represents a much greater effort than it would have done a few years ago, notwithstanding that the'trade position had improved in most countries and that • values of merchandise had been considerably enhanced.

Despite increased income expenses were £2524 less than last year, the ratio to premiums being 31.59 per cent, against 33.21 per cent. Changes in the laws of various countries constantly taking place imposed increased burdens. It was difficult at. times to continue business satisfactorily in some fields, nevertheless it had been the policy of the directors to retain the company s identity, if possible, in every centre where its business has been established.

Losses during the year, with adequate provision for unadjusted losses, totalled £631,808 or 57.01 per cent of premium, as compared with £596,777 or 56.79 per cent last year. This percentage on a mixed fire, marine and accident account throughout the world, might be considered reasonable. The over-all profit on all sections of the company's worldwide business of 10.8 per cent was above the average of that earned by its competitors as a whole. The general manager had just returned from an extended visit to branches in Australian States, and this month the secretary of the company would be leaving on a visit of inspection to Japan, China, Malaya, Burma and India.

Tho balance-sheet showed a sound position. Reserve for unexpired risks is increased by £23,000, being the normal provision by tho company of 50 per cent of the increase in premium income. Investment fluctuation account had benefited by realisations during the year to the extent of £13.370, and now stood at £69,060. Provision for losses unadjusted at balance date showed an increase, but this was an item which must necessarily fluctuate from year to year. On the assets side mortgages had dropped from £46,249 to £34,249, due to repayments. The company's holding in shares had increased from £239,589 to £369.949. These investments were represented by stock in sound undertakings of undoubted stability and earning power. The aggregate present-day market value of the assets of the company was in excess of the amount appearing in the balance-sheet, and it was not too much to say that the position of '"the company had never been stronger than f it is to-day. Wellington Property. There had heen a proposal, he said, to remodel the Wellington building, but upon further examination the board decided to erect on this splendid, site a

modern office building, worthy of the standing of the company. A tender had therefore been accepted for £67,000 for the erection of an eight-storeyed building which should be a valuable asset to the company. The company should be in occupation in about a year's time. A considerable portion of the building was already let.

The business of the company's trustee department for the year had been satisfactory. It is now 20 years since the company secured powers by Act of Parliament to render'the services of trustee, executor, agent, or attorney. During that period the department had shown regular progress along safe and prudent lines. Appreciation of the work of the local directors in Wellington (Sir Alexander Roberts and Sir "William Hunt'., and in Christchurcli (Messrs. A. T. Donnelly and D. E. Wanklvn) was expressed. Dividend and Reserve. The four directors recommended that the dividend be maintained this year at the same rate as last year, namely, 2/ per share. They deemed it advisable to continue the policy which had enabled the attainment of the company's present strong position. The transfer of £50,000 to the general reserve brought that fund to £550,000. This leaves to be carried forward a balance of £165,667. The company ranked relatively, for strength and stability, with the leading insurance companies of the world, and it was the aim of the directors to maintain that standing. The chairman mentioned that two of the directors, Sir Henry Horton, deputy chairman of the company, and Mr. C. INathan, were at present absent from New Zealand. While in Great Britain opportunity was being taken of furthering the company's interests in that important seat of its operations. Directors Re-elected. The motion for the adoption of the report and balance-sheet was seconded by Mr. 0 Nicholson, and carried unanimously without discussion. The retiring directors, Messrs. F. A. Hellaby, C. I. Nathan and Sir Geo. Wilson, were re-elected. , Messrs. H. Gilfi.llan and F. C. Buddie were reappointed auditors. On the motion of Mr. G. R. Buttle a vote of thanks to the directors and to the staff for the zeal with which the company's affairs had been carried out was carried unanimously. At a subsequent meeting of the board Sir James Gunson was re-elected chairman and Sir Henry Horton vicechairman. '