AUTO INSURANCE.

Press, Volume LXII, Issue 18671, 21 April 1926, Page 10

AUTO INSURANCE.

CO-OPERATIVE SCHEME. A LIVELY MEETING. ■ ■ There was some lively opposition from a small but persistent section of a meeting held under.the auspices of the Canterbury Automobile Association last night to consider a co-operative insurance scheme put forward by the South Island Motor Union. Mr W. H. Nicholson, president of the Association, was in the chair. The chairman stated that members had-been called together to hear an address on the question by Mr C. RKobieson. who had just completed a tour in the southern part of the South Island in connexion with th« 3 scheme. .Mr C. K. Robieson Mid that his trip through the South Island had been a great success. There seemed to bo little doubt that there would be"any amount of support forthcoming as soon as policies were issued. Of course a certain amount of opposition could be expected frcm the insurance companies now doing busness in motor-cars. Mr Robieson traced the proceedings which had led up to the scheme being set afoot. He believed that there was no doubt that if it were properly carried out the scheme must be a success. It was proposed to establish an insurance scheme for two reasons, the first being to reduce the cost of insurance to members, and the second to increase the popularity of the Association. The Business to be Done. It was estimated that there were about 10,000 affiliated members of the • various associations concerned,# of whom about 6000 were expected to come into the scheme after it had been established for a few years. Under the proposal it was intended to give marine insurance between the two islands at a reduced rate, and give unlimited third party liability up to the full legal liability of the insurance. It was also proposed to give passenger cover up to £IOOO in respect of death liability and permanent disablement, and £SOO in regard. to partial disablement. • He was of the opinion that 6000 members would "give an income of about £50,000 a year. The working expenses would probably run into £15,000 a year, and it was estimated that the losses would not be more than £20,000, leaving a surplus of £15,000. It was hoped to give a further reduction in rates after the scheme had been going for some time. Those associated with the scheme would not be so sanguine of success if they were not sure of being able to carry on operations at reduced working expenses. Mr Robieson quoted a number of instances in support of his contention that such schemes had proved a success in other centres. He claimed that success had been achieved by the Wairarapa Automobile Association, the New. Zealand Medical Association, and other organisations. The directors had a very favourable reinsurance scheme in respect of which not mare than £250 would be paid out no matter, how much was involved in a loss. He stated, that the State Fire Office commenced operas tions with a debt of £2500, yet it was able to, do business right away. Spoon-fed, Mr K. Robinson: Did it'pay any in-come-tax:"—Not at first. ' It was not spoon-fed?— No. You do not know anything about it: Proceeding, Mr Robieson stated tha,t the directors of the , scheme had £ISOO guaranteed for the first year, and had got one of the finest reinsurance schemes that? could ,be obtained. He was confident in the success of the scheme, and had .made. an offer to go without any remuneration for the. first year so that a good 'fund could be got together. In reply to a question, Mr Robieson stated, thjat he was associated-with the State Fire Ofiioe in its early years, and was appointed general manager in 1910. Mr Robinson claimed that, four mutual insurance schemes which had been mentibned during t« discussion wer.e. carrying on under an expense ratio.oi 50 per cent., Mr Robinson asked what proportioin of the premiums it was' intended; to pay away in reinsurances. " ■ Mr W. L. Minson: He says, that his questions are being asked for the benefit of merabejs.' I say that they have no such purpose. Mr W. R. Carey said tha;t the scheme had been prepared very carefully. Two members who were interested in insurance companies, were present to learn what they could about the scheme. He considered that as • these gentlemen were interested as he had: indicated, the promoters of the scheme should not be. induced to lay all their cards on the taWe. • When the time arrived to £lac© the details'cf the scheme hefore members, that would be, done, but not before. Mr Robinson said that he was aware that it was proposld to work the scheme on the basis- of power. He knew the scheme quite well. It had in fact been talked about all over the City. He was not present, as was suggested, on a fishing expedition. Profitable Business. Mr Minson said that it was abundantly clear that the insurance companies would be sorry to lose the business they did in : automobiles, which must lie v.ery. profitable.to them, otherwise they would not be making Buch a song about' the matter. The chairman said that the scheme had nothing whatever to do with, the Automobile Association. It would be open to members to join up with it if they desired to do so. Mr Robinson held that the rates in New Zealand were noit so high as was alleged in comparison with some other countries. • Mr Carey asked Mr Robinson how it was that in view of the- dismal picture he had. painted, insurance shares were so high. , „ Mr Robinson replied that most of the business in insurance was dona outside the Dominion. As a matter of fact. New Zealand was one of the two worst countries in the' world for fire loss. Most of the dividends paid by insurance companies did not come from New Zealand but outside of it. Mr Minson: Well, we are going to try to get in New Zealand. Mr H. W. Candy said that if the scheme turned out to be a failure the insurance companies could turn rouud and sav,."l told you so." He considered that the interest in it that was being shown by the companies' representatives could be taken as a compliment by the promoters.A Show of Hands? Mr P. R.. Harman, secretary of the South Island Motor Union, said that the companies had been approached by the Union in consequence of numerous complaints being made of high charges, and they had made a tentative offer which was considered, but was dropped in favour of the present scheme. He considered that members fhould give their support to the scheme. The chairman stated that the matter was one for individual action. Mr H. C. Harley said that some of the discussion had certainly been instructive. He was convinced of the soundness of the scheme and would like to see'a show of hands of those who favoured it-.. Mr Robinson: Who is chairman of the meeting ? The chairman indicated that, he did act regard a. show of hands as being