THE MUTUAL LIFE AND CITIZENS' ASSURANCE COMPANY, LIMITED

Press, Volume LXXIX, Issue 23948, 15 May 1943, Page 7

THE MUTUAL LIFE AND CITIZENS' ASSURANCE COMPANY, LIMITED

Contributions To War Effort EXPENSE RATE REDUCED The fifty-sixth Annual Meeting of the Company was held in Sydney on May 6, 1943. The Chairman, Sir John Feden, in moving the adoption of the report, balance-sheets, and accounts, said;— “With your concurrence, I propose to take the annual report, balance-sheets, and accounts as read. "The war again had the first and paramount claim upon the Company’s resources. During the year we continued to contribute to war loans in Australia and in the other countries in which we carry on business—New Zealand, Canada, and the United Kingdom. The total contribution for the year was £2.870,000. From the beginning of the war to the end of 1942 we contributed more than seven and a half millions. Our subscription to the recent Commonwealth Loan was a pillion and a half. “The amount that we subscribed in 1942 to Commonwealth Loans was more than the increase in our funds during the year. This means that we subscribed in Australia the whale of the year’s accumulations and almost the whole of the moneys repaid by those to whom we have made advances. “The office ai.J field staffs have been heavily depleted for active service, the auxiliary services, and war work. More than 60 per cent, of our male clerical staff between the ages of 18 and 60 are serving in the naval, military, and air forces. With losses of experienced staff it has been no simple matter to carry on, and the position is becoming more acute. Notwithstanding that the field staffs have been drastically reduced, and that new business activities have been restricted through the need for releasing as many people as possible to meet manpower requirements, the hew business has been considerable. The war has brought home to people the value of life assurance. This is shown not only by the volume of new business, but also by the fact that the percentage of policyholders maintaining their policies in full force is higher than it has ever been. Surrenders and lapses have fallen to remarkably low levels. “In the Ordinary Branch, 17,016 new policies, assuring £6,113,505. were issued: in the Industrial Branch, 75,719 policies, assuring £4,236.483. The policies in force now number 789.550. With bonus additions, they assure £104,274,000. “The assets of the Company increased by £2,382.471 to £36.554,400. The Life Assurance Funds increased by F 2,077,547 to £32,028,475. These funds are required to cover the estimated policy liabilities, The basis of calculation used in making the estimates is the most stringent used in Australia. “The large sums that we have contributed in Australia and New Zealand to the war effort have increased our holding in Commonwealth and Dominion securities, and decreased the rate of interest earned on the funds and reserves. The rate earned in the Ordinary Branch, £4 11s 6d per cent was reduced by taxation to £3 19s 8d per cent. The corresponding figures in the Industrial Branch were £4 13s 7d and £4 Is 3d per cent. “The total income, including income from accident business, was £5,514,233. "The expense rate was again considerably reduced. In the Ordinary Branch, it was 11.14 per cent, of toe premium income, and 7.64 of the total income. In the Industrial Branch it was 27.56 per cent, of the premium income, and 22.27 per cent, of the total income. These percentages compare very favourably with those of three years ago. In 1939 the expense rate in the Ordinary Branch was 14.54 per cent, of the premium income, and 9.87 per cent, of the total income; and in the Industrial Branch the corresponding figures were 32.58 and 25.92 per cent. As a slight but significant detail in the careful control of current expenditure, those present here to-day will have noticed that the printed matter prepared and circulated for this meeting gives the essential information in a condensed form in order to save paper and printing. ’ “The amount paid to policyholders and their representatives during the year was £2,107,824. The total of such payments since the inception of the Company is £45.233.501. Death claims resulting from the war increased, but were still below those of the last war. The amount of the war claims at the end of the year, including claims paid an- claims in course of settlement, was £284,760, "In view of reduced interest earnings, increased taxation, and the fact that it is not possible to forecast the claims that may arise from the war, the bonuses- allotted to policyholders this year will be on a lower scale than was the case last year. The lowering of bonuses is in line with the course adopted by other life assurance offices. "In times of peace or war, life assurance offices, soundly based and well managed, give an invaluable service through which policyholders may provide for the needs and emergencies of

the future, and have satisfaction and steadiness of mind from knowing that they have done their best to safeguard those who are dependent upon them. “In the circumstances of the present time, life assurance has a special significance for Australia and New Zealand. Not only do the life assurance offices carrying on business in the Commonwealth and the Dominion subscribe large sums to each war loan, but every policyholder who saves for the payment of premiums helps to combat inflation. "The money subscribed by the life assurance offices is derived from two main sources—premiums paid by policyholders, and interest earned on the balance of premium income accumulated from the commencement of the policies. The aggregate of premium income accumulated in Australia and New Zealand each year amounts to many millions, and results from an immense number of payments. Most of the payments are small. In industrial assurance, which has now attained a magnitude of great financial and social importance, they are only pence or shillings. Whatever may be the amount of each payment, the premiums are savings of policyholders, and contribute to the aggregate accumulated by the life assurance offices, instead of competing for the limited supply of civilian goods and services. “Where a life assurance office lends to the Commonwealth and the Dominion for the needs of the war an amount which is more than the year’s increase in its funds, diverting the money from civilian to war expenditure, it takes an important part in the fight against inflation. “In the case of our Company the premiums are savings for nearly 800,000 policies. The average amount of the policies in 1942 was £llß, and the average amount paid on each policy during the year in premiums was £4 16s 9d. The extent to which we have been able to contribute to war loans is in no small measure due to the success and development of the Industrial Branch. Industrial assurance provides a specialised service for wage-earners through a well-planned system of collecting weekly premiums at the home. Its steady growth year by year, and the extent to which it has grown since the Company pioneered the system in Australia 56 years ago, are the best evidence both of its usefulness in bringing life assurance within the reach of the policyholders, and of its value and importance in mobilising small sums for wise and beneficial investment, and in this war for indispensable assistance to the Government.’’ In seconding the adoption, Mr Eedy said: . “As I have been so closely associated with the staff almost from the foundation of the Company, the Chairman has asked me to express the Board’s appreciation of the loyal and efficient service of the staff throughout a difficult year. I do so very willingly, and at the same time I should like to say that the members of the staff who have carried on here have been mindful of the needs of those on active service and of prisoners of war. They have given thought, effort, and money in order that a regular supply of parcels may be sent for the cheer and comfort of their fellow officers and their comrades on service and in prison camps. “Officers of the Company have served in all theatres of the war and have won high distinctions. Some have been wounded, or are missing or prisoners of war. Some have laid down their lives. Every one here will join in a tribute of admiration to their service and sacrifice, and no one will forget that this war has brought grief, anxiety, and strain to many families. They, too, have given proof of endurance and courage/’ —1