FINANCE AND COMMERCE

Press, Volume LXXI, Issue 21656, 14 December 1935, Page 15

FINANCE AND COMMERCE

IT. AND G. MUTUAL LIFE SOCIETY

ANNUAL MEETING A SPLENDID RECORD There was a large attendance at the fifty-ninth annual meeting of the Australasian T. and G. Mutual Life Society, held yesterday in the society’s building in Collins street, Melbourne. The managing director (Mr J. T. Thompson), who presided, moved the adoption of the annual report, revenue account, balance-sheet, and actuarial report, and said;— Gentlemen, —I have the honour to present the directors’ report and accounts for the year ended September 30, 1935. In accordance with the usual custom, I propose to comment briefly on the more important items in the accounts, dealing with them in the order in which they appear. Record New Business

The new business written and completed during the year consisted of 169,695 policies, assuring £13,790,402, of which 29,122 policies, assuring £8,015,648, and £20,338 per annum of annuities, were issued in the ordinary department, and 140,573 policies, assuring £5,774,754, in the industrial department. This volume of new business, obtained solely in Australia and New Zealand, constitutes a record in the history of the society, and exceeds the previous year’s figures by 2677 policies and £973,588 of assurance. Such a record, obtained in the face of strenuous competition, and accompanied as it is by a slightly decreased expense rate, is very gratifying to your board. In the accident department 28,278 personal accident and sickness policies were issued, assuring £7,825,162, more than double the number and amount issued last year, while, in addition, 9757 policies in the ordinary department were endorsed with accident • benefits. I propose to make at a later stage some further comment on the progress of this department. Tne total income for the year amounted to £4,507,932, an increase of '£395,198 over last year. This income arises from premiums paid by policyholders amounting to £3,597,783, and (rom interest on investments amounting to £970,149. This interest income, which takes no credit for any interest overdue and unpaid, shows a rate on the mean assurance funds of £4 10s 9d per cent., a satisfactory return, considering the very low rates ruling on new investments to-day. The payments to policy-holders this year amounted to £1,376,413. This figure is slightly less than last year, due almost entirely to a reduction in the amount of endowments maturing. This was foreseen, as our records tell us what our future commitments will be from year to year I am pleased to add' that our mortality experience continues to be exceedingly .favourable. The assurance funds have increased to £22,432,506, the addition for the year, £2,094,141, being a record in the history of the society. The fidelity and contingency funds now amount to £562,074, the increase icr the year having arisen chiefly from a transfer from the assurance funds of £25,000." It may be mentioned here that the accident department is now so firmly established that it no longer requires the use of the sum of £IO,OOO advanced to the department in 1930, and the same has, therefore, been returned to the ordinary and industrial departments. Sound Condition of Assets Out of the total assets of £23,170,300 there is invested £15,116,452, or 65 per cent., in government, municipal, and public body securities, nearly 16 per cent, in mortgages of freehold, 9 per cent, in properties, and 10 per cent, in policy loans and other investments. Such items as overdue interest, agents’ , balances, plant, furniture, printing, and stationery, and other non-interest-bearing assets have been excluded altogether from the balance-sheet, i The disposition of the assets leaves little to be desired, and it is very satisfactory to know that such a large proportion is in Government and other gilt-edged securities, as safety in investing the funds should be the chief objective of a life assurance society. lYour board gives constant attention to .the selection of all new investments ; iand to the review of the society’s old investments, and is satisfied generally (that the same are in a sound condition. . , The freehold premises’ account has been written down by £25,000 this year, which is more than sufficient to offset any depreciation, but the total chows an increase due to the purchase of further sites in New Zealand ana ; (Western Australia to provide for the rapid expansion of the society s busz- : ness. „ Same Liberal Bonuses Turning to the actuarial report you will see that the stringency of the valuation has been maintained ana special provision has been made lor such items as immediate payment oi claims and suspended mortality. The surplus disclosed of £ 7f 4 ,375 was sufficient, after setting aside £50,000 for actuarial contingencies, to provide in both departments bonuses on the same liberal scale as granted last year. It has also been found possible to continue to grant extra benefits to agea and disabled policy-holders. I would point out, however, that the allotment of bonuses depends to a large extent on the rate of mteres which the funds are capable of owning. The society is indeed fortunate to have such a large amount invested at over 4£ per cent., but it is clear that if to-day’s average market rate of interest for safe investments is much less than that, and renewals of maturing loans must be invested at the market rate, the time may soon come, if these low rates should continue, when all life societies will have to revise their scales of bonuses. Accident Department’s Rapid Progress The personal accident and sickness department continues to make exceptionally rapid strides. The premium revenue has increased by nearly 4U per cent, above last year’s figures and now totals £80,963. The claims ratio is exceedingly good and is a satisfactory criterion of the careful selection of risks. After making full reserves for all unexpired risks and other contingencies it was found possible not only to recoup the amount advanced by the ordinary and industrial departments to inaugurate the accident department in 1930 but also to grant extra benefits to policy-holders. In my previous addresses I have alluded to extra benefits, beyond those set down in the actual contracts, which the society has been able to extend to policy-holders, and I am pleased to be able to inform you that it has been found possible to continue these benefits this year. By the lien revival system industrial policy-holders have been enabled to bring their policies into benefit again v/ithout the payment of any arrears of premium, and, no less than 37,000 policies were so helped last year. The nursing service is expanding. Nearly 29,000 visits were paid last year, and we are continually receiving expressions of thanks from grateful policy-holders.

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The waiving of future premiums in the industrial department in cases where the life assured has become permanently and totally disabled has been deeply appreciated. Similarly, the early payment of claims in some cases or the cessation of premiums in other cases has conferred a great boon on many aged policy-holders. The free periodic medical examination has proved of much help to those policy-holders who have availed themselves of this service, but I should like to see more use made of this valuable privilege. Notable Achievements I have covered practically every item of importance in the accounts, and I think you will agree with me that, the results in all departments have been excellent. The completion of £13,790,402 of new business, excluding the figures in the accident department, and the addition of £2,094,141 to the funds are notable achievements. These are record figures, but I am confident, gentlemen, that this standard will be maintained. I say this as I believe that there are unmistakeable signs of a steady improvement in business conditions. Blessed with several good seasons during and since the depression, the export trade of Australia is now showing marked expansion, and, as you all know, very much better prices are now being obtained for wool, wheat, and other primary products. Another important factor in Australia’s recovery is the consistent growth of Its gold production, with gold prices likely to remain at a high level for some time to come. I am glad to say that there has also been considerable improvement in our secondary industries, with the consequent re-employ-ment of the workless. I am very pleased that this is the case, as the T. and G. Society has a very large share of the industrial insurance business of Australia and New Zealand, and is, therefore, very closely linked with the fortunes of the working classes. There appears to be no reason why conditions should not continue' to improve, and I look forward to the pleasure of being able to present you with another satisfactory balance-sheet when we meet again at this time next year. In conclusion, I should like to refer to the excellent work of the staff dur* ing the last year. We are proud of our representatives in the field, and I feel sure they are also proud of their calling, because of their conviction that the value of life assurance is worth bringing home to the people, and because 'they believe and desire others to believe that it is the duty of every man to make sufficient provision, not only for his old age, but also for his dependents after his death. To the members of the field staff, and also to the indoor staff throughout Australia and New. Zealand, I would convey the board’s deep appreciation of their capable and loyal service, which has contributed in no small measure to the outstanding successes of the during the last year. The retiring directors, Mr Robert McDonald and Colonel Sir Charles E. Merrett, and the retiring auditors, Messrs A. McK. Hislop and C. A. Holmes, were re-elected. —1