LIFE INSURANCE IN N.Z.

Press, Volume XCIX, Issue 29107, 20 January 1960, Page 23

LIFE INSURANCE IN N.Z.

Growth Of Funds In 10 Years

Investible funds held by the life assurance offices in New Zealand have multiplied two and a half times in the last 10 years. In 1949 the life offices had £99 million invested in New Zealand to meet their future commitments: at the end of 1959 these funds had risen to approximately £250 million. The New Zealand m q na ff or of the A.M.P. Society, Mr H. M. Collie, drew' attention to this upsurge when announcing results achieved by the society for the year 1959. Income over the 10 year period, he said, had shown a corresponding increase and the life offices in New Zealand received approximately £4O million in 1959 by way of premiums and interest. Interest and Premiums

“Interest income has increased over the period at a greater rate than premium income,” said Mr Collie. “This reflects the rise in rates of interest in more recent years and the wider field of investment which life offices have embraced in the post-war period. “Premiums received by the life offices are currently nearly 3 per cent, of National income, whereas in pre-war days New Zealanders paid slightly more than 3 per cent, of national income towards life insurance.”

The incentive to save through life insurance arising from the deduction permitted from taxable income was much less now than in pre-war days. In spite of depreciation in currency, the maximum deduction for personal life insurance premiums, superannuation fund contributions and so on had been raised from £l5O to only £175 in the last 10 years. In Australia it was now £A4OO and, furthermore, the taxpayer in that country was permitted to deduct premiums paid by him on members of his family whereas in New Zealand the deduction was limited to policies on the taxpayer’s own life. “New policies written in New Zealand in 1959 were in excess of £l5O million,” said Mr Collie. “This, when compared with new sums assured of £43 million in 1949, suggests a remarkable growth in life assurance saving over the decade.” Temporary Insurance Figures for new, sums assured should, however, be regarded with caution, he said, because in recent years there has been a marked increase in temporary insurance, a type of insurance akin to fire insurance in which a claim is paid only if the assured dies within a year, or a specified term of years. Insurances of this nature naturally involved very low premium rates and, of course, very little increase to the premium revenue of the life offices. Because of this development it was now accepted that new insurances completed by life offices should be measured in terms of new premiums rather than new sums assured, Mr Collie said.