THE MUTUAL LIFE AND CITIZENS' ASSURANCE COMPANY LIMITED

Auckland Star, Volume LXXV, Issue 106, 6 May 1944, Page 8

THE MUTUAL LIFE AND CITIZENS' ASSURANCE COMPANY LIMITED

(Published by Arrangement)

£14,000,000 SUBSCRIBED TO WAR LOANS INCREASED FINANCIAL STRENGTH The fifty-seventh annual meeting of the Company was held in Sydney on April 27, 1944. The Chairman, Sir John Peden, in moving the adoption of the Report, Balance Sheets and Accounts, said:— "A copy of the Annual Report, Balance Sheets and Accounts for 1943 has been in your hands for some days. With your concurrence I propose to take them as read. "The Company has continued to support the national war effort by subscribing to war loans without stint, and by restricting with rigid economy its use of manpower and materials. From the outbreak of war the total subscribed, including conversions, in Australia, New Zealand, Canada and the United Kingdom, in each of which we carry on business, has exceeded fourteen millions. During the year we subscribed more than four millions. This amount again exceeded the growth in our assets, and absorbed the whole of the year's accumulations, and almost the whole of the moneys repaid by borrowers. Our subscription to the current Australian Victory Loan was £2,500,000.

"Although the Field Staff has been drastically reduced by enlistment and by employment on essential war service, the new business approached the high level of the pre-war years. In the Ordinary Branch the new policies assured £6,800,388, and in the Industrial Branch £4,142,727. The number of policies in force continues to increase, and now totals 535,767, assuring with bonuses £111,873,756, the average sum assured for each policy being £120. This growth reflects the favourable experience of the Company in conserving business. The number of policies lapsed and surrendered has steadily declined in recent years, and in 1943 the proportion was lower than in any previous year.

"In common with all enterprises m wartime, life assurance has had to meet increased difficulties and rising costs, but notwithstanding these facts and the continued high level of new business it has been possible to make a considerable reduction in expense rates. In 1939, in the Ordinary Branch the percentages were— to premium income 14.54, and to total income 9.87. In 1941 these percentages were respectively reduced to 11.49 and 7.79, and in 1943 to 10.61 and 7.33. In 1939, in the Industrial Branch the percentages were— to premium income 32.58, and to total income 25.92. In 1941 these percentages were respectively reduced to 28.67 and 23.13, and in 1943 to 25.36 and 20.63. In both Branches the expense rates are outstandingly low. In the Industrial Branch they are the lowest since the Company pioneered Industrial Assurance in Australia.

"At the end of the year the total assets of the Company, comprising all funds for backing and meeting policy and other liabilities, were £39,357,695, an increase of £2,803,295. The total income from all sources was £5,914,805. Payments to policyholders were £2,038,385, an average disbursement for each working day of over £7000. Payments in respect of war deaths_ were £174,598, bringing the total since the war began to £459,358. The total payments to policyholders since the inception of the Company amount to £47,371,886. "Although interest rates have been falling for the last decade, and since the outbreak of war there has been a large diversion of our assets into Government loans, with a corresponding decrease in the average rates of interest earned, the securities in which the assurance funds are invested earned during 1943 £4 9/9 per cent for the Ordinary Branch, and £4 10/ per cent for the Industrial Branch. After deduction of taxes these rates reduce to £3 19/11 and £3 19/9 respectively.

"Bonuses for 1943 have been declared for every class cf participating policy on scales which are the same or greater than those of last year, and compare favourably with those of life assurance offices here and abroad. The new bonus added to each policy is recorded in our books, but in line with other life offices, to meet the wishes of the Directorate of Manpower and the Department of War Organisation of Industry, the Company does not propose to issue the usual bonus certificates.

"Nearly 99 per cent of the premiums paid on our Industrial policies in Australia and New Zealand are in respect of policies which have the right to participate in bonuses on terms similar to those of the Ordinary Branch. The non-participating section of this Branch has been closed to new entrants, for many years in Australia and New Zealand, and more recently in Canada. A sum of £100,000 that is not required for a reserve in this closed section has been transferred to general reserve in the General Branch, where it will be available for the security of all sections of the business. "The record of the Company for 1943 is a good one. It has maintained and increased its great financial strength, written satisfactory new business, conserved and promoted the interests of policyholders, and been able to provide an amount even larger than in the previous years of the war to aid in the preservation of national security. . , "By careful and economical management it has reduced expense rates in both the Ordinary and the Industrial Branch to levels which are notable achievements in Australia or in any other country with consequent benefit to policyholders. The expense rates in the Industria Branch ar; so low that they approach closely to the rates which are usual in the Ordinary Branch in life assurance offices in North America. "Policyholders have shown a appreciation of the value of life assurance, and the percentage maintaining their policies in f u | war ' which has increased during the war, ,„ 9C . hicrbpr than it has ever been. on the lives of breadwinners, particularly of those sei vn g in the forces, has given a sense of c;priiritv to many families, and dis bui-sements to poUcyholcters and I then ffSSS hl™ these times" assuraifce and disbursemems have both contributed to high and lesoiu e only do policy holders provide security for themselves and their cie pendents. The payment of each piewhen' mobilised pany" tffl iTgf to each war loan. In this way policyholders aid m the su cc es.,ful pi osecu tion of the war, and render a valuable service in helping to combat inflation. have "Great life assurance offices nave done invaluable pioneering work in Australia and New Zealand in encouraging thrift m order to make provision for old age and the i ead justments that follow up° n 1 :h( r de of breadwinners. In both the Commonwealth and the Dominion they have done and are doing then work with marked success, and witn such quiet efficiency that it is so ™f" times forgotten or overlooked tnat thev provide a service, which can compare with any in the world, for millions of people interested in the stability and progress of life assurance." . nr A nr In seconding the motion Mr. A. M. Eedy said: — . . "The year now under review is tne 25th since the close of the last war At the end of 1918 the sums assured in force in the Ordinary Branch 111 Australia and New Zealand were £22 511 275. At the end of 1943 they were £67,377,032. In the Industrial Branch the growth has been even more remarkable. The 1918 total of £5,460,478 for Australia and New Zealand rose to £26,118,677. There is ample evidence in these figures of the importance our people attach to life assurance, and in particular of the increasing popularity of industrial assurance.

"Throughout this war, with numbers depleted as the result of over 800 members of the staff serving in,the forces, auxiliary services and on essential war work, the remaining members have made every effort to cope with the difficulties of carrying on both in the office and in the field. I speak for the Board as well as for myself in paying a high tribute to the manner in which the whole staff has discharged its duties. I can speak, too, for everyone present this morning and for everyone associated with the Company when I say that we do not forget the tribute that is justly due to those who are serving or who have served in the war, and to those who laid down their lives.''

A vote of thanks to the Directors, Trustees and Staff was proposed bj r Mr. E. P Hollingdale, and carried by acclamation.

A vote of thanks to the Chairman, proposed by Col. J. W. Clark nated the proceedings.