THE MUTUAL LIFE & CITIZENS’ ASSURANCE CO., LTD.

Press, Volume LXXXVI, Issue 26123, 27 May 1950, Page 9

THE MUTUAL LIFE & CITIZENS’ ASSURANCE CO., LTD.

BUSINESS MORE THAN DOUBLED DURING PAST SEVEN YEARS

The sixty-third Annual Meeting of the Company was held in Sydney on May 25, 1950. The chairman, Sir Henry Manning, in moving the adoption of the Report, Balance Sheet and Accounts, said:

“Before submitting the Company’s Annual Report, Balance Sheet and Ac-I counts, I wish to take this opportunity of referring briefly to the retirement of Mr Arthur M. Eedy, C.8.E., who has been associated with the Company for more than 63 years. Mr Eedy, as most of you know, entered the Company’s service shortly after it commenced operations in 1887, and duriing his long and meritorious service with the Company (including 14 years in its chief executive position as Managing Director), has been in large measure responsible tor its development on the sound lines which have made it a leading financial institution, io very few men is it given to serve the one institution with such distinction and over such a long period. In retiring now, Mr Eedy carries with him the affection of all, and the Board has placed on record its deep appreciation of his outstanding service.

“I am pleased to be able to ‘announce that Sir Leslie Morshead, a Trustee of the Company since 1946, was appointed to fill the vacancy on the Board.

"Last year I drew your attention to the fact that the Company had been successful -in acquiring suitable sites tor office accommodation in Brisbane, Perth and Hobart, and since our last meeting we have been fortunate in acquiring a very suitable site in Adelaide, where, as soon as practicable, your Directors intend to erect a modern building to house our own staff. The rest of the building will be lec for office and professional accommodation. "The report for 1949 has already been in your hands for some days and you will have noted the further progress which the Company made in that year. With your concurrence, and in accordance with our usual practice, I propose to take the report as read. ‘‘ln less than seven years our business in force in Australia, New Zealand, Canada and Great Britain has more than doubled, and, at the close of 1949 the Company had in force well over 1.200,000 policies assuring, with bonuses, over £218,000,000. During the year 55,099 new policies were issued in the Ordinary Branch assuring £23.076.132, and 84.990 policies assuring £8,639.426 were written in the Industrial Branch. Although fewer policies were completed in each Branch than in 1948, the average size of the policies was greater, and the total new business constituted a record for the Company.

“The Company’s funds and reserves, after taking into consideration the increase in our assets overseas resulting from the devaluation of the £ in terms of the United States and Canadian dollars, increased by £6.067.690. and the assets of the Company at the close of business on December 31, 1949, exceeded £66.000.000. “The M.L.C. has maintained its favourable position among its contemporaries. because of economical management, sound investment at the highest rate of interest consistent with security, and a favourable mortality experience arising from careful selection of its risks. Since 1938, when the effective rate of interest in the Ordinary Branch before deduction of taxes was £5/-/l, rates of interest on gilt-edged investments have steadily declined. I have on several occasions drawn your attention to the serious effects of low interest rates on the economy of the country in general, and in particular on the institutions of life assurance. It is not necessary for me to stress the fact that without reasonable interest earnings the cost of life assurance would obviously oe much higher, and I am therefore pleased to be able to tell you that last year the effective rate of interest on our total Life Assurance funds after deduction of taxes, was £3/13/s—an increase of 3d per cent, over the rate for 1948; and that your Directors are confident that this rate will be maintained in 1950. “The expense rate of the Ordinary Branch was reduced by .51 of 1 per cent, of the premium income and that of the Industrial Branch by .36 of 1 per cent.—a very creditable performance in the face of high costs for all services and commodities. “Mortality is the third major factor affecting the amount of surplus available for distribution among the policyholders. Our mortality experience in 1949 has been most satisfactory, and has enabled the reserves of the Company held for the benefit and security of policy holders to be strengthened still further.

“An analysis of the Company’s assets proves that quality is not being sacrificed for yield. More than 72 per cent, of our assets are invested in Government securities, municipal loans and loans to public bodies, while we have further increased our investments in loans to Co-operative Building Societies, generally with Government guarantee. Our Joans on mortgages have increased by more than one million seven hundred thousand pounds, and a great part of this increase has been applied to assist the building and purchase of homes in Australia and New Zealand, where adequate housing is still one of the most important national tasks. Purchase of shares, which has become a common form of investment for Australian life assurance companies since the war, is receiving the careful attention of the Board. This type of investment now accounts for just over 5 per cent, of our assets. “Post-war conditions, in particular restrictions on interest, have reduced the bonuses of Life Assurance offices (not only in Australia and New Zealand but also in England and the U.S.A.) below the high rates current just before the war; but bonus declarations are still substantial. In this regard we have continued the policy of conservation, which has been so successful in the past, and in the current year we have made larger additions than usual to reserves. If there is no untoward turn in world affairs, prospects for the future seem bright.

“One noteworthy feature of our Balance Sheet is that loans on policies account for only 2.56 per cent, of the Company’s assets, compared with 6.24 per cent, of our assets 10 years ago, indicating the general prosperity of the country and at the same time the de-

sire of policyholders generally to maintain the full value of their life assurance.

“The Company’s investments have been selected to fill the varied needs of an expanding economy, and I think it is more readily appreciated to-day than ever before that life assurance plays an indispensable part in the life of the nation by stimulating savings and directing them into sound investments. The productive investments of the Life Offices play their part in adding to the economic security not only of their policyholders—which is of course their primary function —but of the country generally, inasmuch as all sections of the community benefit from the employment opportunities created. It is especially gratifying to those engaged in the industry to know that each year the number of men and women who are voluntarily making provision fdr the protection of their dependants and their own security is growing steadily; but it is wise for us to remember that there is very much more to be done before it will be possible to say that the community has sufficiently widespread protection. “The financial statements in the Annual Report and Balance Sheets, which are before you, summarise the results of the year’s operations and provide striking evidence of the careful and efficient management which has been characteristic of the Company since its inception. All sections i of the staff have contributed to the results achieved, and on behalf of the Board I wish to pay tribute to them I for the way in which th*’’ have dis- [ charged their responsibilities through- I out the year. Life Assurance is the choice of free men as the best way to guarantee personal and family security, and our staff can justly claim they are engaged in national service of the greatest importance.” . , , Advt.