S.I.M.U.

Press, Volume LXVI, Issue 20037, 19 September 1930, Page 6

S.I.M.U.

MUTUAL INSURANCE. A SUCCESSFUL YEAR. The- directors and secretary of the South Island Motor Union Insurance Association are naturally proud of the low expense ratio of the ousiness, the figure being 19.2 per cent, of the nex premium income, accorutng to the fourth annual report just pi.bushed, which, inter ana, is as tollows: — rrenuum income—lho premium income, less return*, refunds, anu re-.nsurani-cs, amounted u> 3j-4d,\Mi) 17s ua, as against tjw,*b-j os iast year, .vlnlsi loss.es, iess re-inaurances ana recoveries amuuni-ou to ijdiiH us id, as against rdiio iUs yd the previous year. surplus—'l he net result of tne year s operations, atter making provision for i reserve for unexpireu risks, deprecation of securities, anu all other liabilities, and paying during the year a sum of £l2ab is 6a in special discount ooruses to policyholders, shows a surplus oi £«-iO3 2s 3d, which must be considered a very satisfactory result. Total Funds —The total funds at the end of the year were ±31,026 4s 4d, of which amount £11,257 is lOd has been placed to reserve for unexpired risks, and after allowing for all other liabilities in connexion with unpaid claims, commissions, income tax, and re-insurances, leaves a balance of £15,531 10s Id, which has been placed to credit of general reserve. Loss Uatio —Our loss .ratio in proportion to net premium income over the past twelve months is. 41.17 per cent., and though somewhat higher than in previous years, compares favourably with the average loss ratio by all the companies in New Zealand doing that class of business which mos.t resembles that of this Association—the Government Statistician's last report, shows an average loss ratio by the companies of 00.62 per. cent. The comparison is the more telling when it is remembered that <>ur premium rates are on a lowei scale than that of the companies, and once again shows that the business secured by the Association is of the best class. Economy of Management—-Expense Itatio--Afte: taking into consideration our reduced premium rates, it might reasonably be expected that our expense ratio had slightly increased, but on tho contrary, it has been still further reduced, and covering all charges except claims and depreciation and bonuses is 19.2 per cent, of net premium income. For comparative purposes it may interest members to know that the Government Statistician's last report shows an average expense ratio of 36.57 per cent, for all the companies doing a similar class of business. Compulsory Third Party Insurance; — We have now had one complete year's experience (f risks taken under the provisions of the Motor Vehicles Third Party UisksAct. and though ib is difficult to say at the time of making this report what the actual result will bo (owinq to the difficulty of finalising personal injury claims) it is to be able to report that the business secured has not resulted in a loss to tho Association. One year's experience of this of business obviously does not allow of any conclusion being arrived at as to whether the premiums at present being paid under the Act aro too high or too low. and several years must elapse before a reliable estimate can be arrived at.