COMMERCIAL N.Z. Insurance Has 22.5% Profit Rise

Press, Volume CVIII, Issue 31762, 20 August 1968, Page 16

COMMERCIAL N.Z. Insurance Has 22.5% Profit Rise

fNm Zaalond Press Association) AUCKLAND, August 19. The New Zealand Insurance Company, Ltd, Auckland, boosted its group profit by 225 per cent in the year to May 31, after recording vigorous growth in underwriting and investment income, both real and as a result of devaluation.

The record profit of $2,841,782 is higher by $521,740 than the previous record earnings achieved last year.

The full accounts show that underwriting and investment activities overseas have been incorporated at a mixture of pre-devaluation and post-devaluation rates of exchange. Changes have been made to the manner of publishing underwriting figures, commission now being included as a trading cost rather than as a deduction from premium income as written previously. On a comparable basis, net premium income shows an Increase of $7,151,133 to 539.093.239 and after providing $932,421 more at 82.073,973 for unexpired risks, earned premiums are up $6,218,712 at $37,019,266. Devaluation Effect The chairman (Mr A. G. Wilson) says that of the increase In premium written, about s3m arises from the impact of devaluation on overseas business. Even without this, he says, there has been a satisfactory real growth of just more than s4m in the volume of premium written. Expenses are shown at $14,026,539 an increase of $2,561,945, and losses are up

$3,477,589 at $21,857,291. Depreciation provision is $162,323 more at $550,667.

Loss Ratio

The loss ratio to premium earned again shows an improvement standing at 59 per cent as against 59.7 per cent and 60.1 per cent in the two previous years calculated on a comparable basis. The underwriting surplus is higher by $70,266 at $772,134 and investment income, before tax, shows an increase of $504,885 to $2,257,013. Mr Wilson says that about 35 per cent of the increase in investment income arose from devaluation. As announced, the dividend has been stepped up from 12 per cent to 14} per cent, the third successive increase. It absorbs $322,320 more at $1,869,456. Shareholders' funds are up $4,815,721 at $25,671,441 including steady paid capital of $12,892,800. Devaluation brought set investment gains, on realisation, of $3,881,945 and revaluation of overseas properties is included at $1,920,417, a total of $5,802,362 credited

to contingencies reserve. The company plans to defer decision on interim dividend until results of the first six months of world-wide trading are known. On this basis, the interim dividend will be announced in January with payment on the third Wednesday in February. Previously, the interim has been announced in December and paid in early February.

Business Personal Mr W. H. Brown, economist at the A.N.Z. Bank head office. Wellington, has been appointed senior economist at the bank’s general mana. ger’s office in Melbourne.