Full recovery by N.Z. Insurance

Press, 21 July 1976, Page 20

Full recovery by N.Z. Insurance

The improvement in short-term underwriting, reported by New Zealand Insurance Company, Ltd, in the first half was sustained in the second half, and the company reversed last year’s loss on underwriting of $4,061,000 into a surplus of $243,000 in the vear to May 31.

The directors say in their preliminary report that unaudited group net profit rose from $BO,OOO to $5,426,000. On an equity accounting basis the profit shows an increase from $129,000 to $5,449,000. Net premiums written rose 37.0 per cent to $114.8 million. This figure is for short-term premiums only, and excludes life assurance and compulsory third party motor insurance in New Zealand. The investment income after tax increased from

SS.OM to S6.OM, while shareholders' interest in life assurance rose from $152,000 to $270,000. This made the consolidated surplus $6,541,000 compared with $1,144,000 last year.

The net profit of $5.4M was reached after providing $157,000 more for depreciation at $1,151,000, bringing in shareholders’ interests outside the group of $36,000 compared with a deduction of $70,000 the previous year, and an adjustment of $23,000 for equity accounting against $49,000 before.

The directors will recommend at the annual general meeting on September 24, a final dividend of 10c a share (last year 8c) making a total distribution for the year of 18c (last year 16c a share); ex dividend September 8. They say that they are pleased tc report that shortterm underwriting has reverted ’o profitability (although modest) after the deficit at the en! of the last financial year and also after the deficit of $746,000 at the half year, the latter being eliminated during the second half of the year.

“As foreshadowed in the interim report for the half year to November 30, the short-term underwriting improvement noted in the first half of the current financial year was sustained in the second half; nevertheless, there are still a number of markets where more effective action is required before insurers can consider their position as satisfactory.

“In co-operation with other responsible insurers this aspect continues to receive our close and constant attention,” the directors say.