Capital Life expects slower growth

Press, 8 March 1978, Page 14

Capital Life expects slower growth

PA Auckland Capital Life Assurance, Ltd, showed strong growth ; in business assured and premium income in the year to September 30, but because of the slump in the economy the directors do not expect | the high percentage ini' creases to continue, the. I chairman (Mr E. D. O. Clarke) says in the annual report. New business during the year rose 80 per cent to S34M, and premium income 38.5 per cent to $977,106. At September 30, sums assured in 8414 policies (last year 6452) amounted to $84.7M, an increase of 51.7 per cent. Annual premium [income rose 24.8 per cent to '52,695,135. ! Contrasting with these increases is the marginal rise in net profit, which at ,$79,955 was only $1094, or 1 4 per cent, higher than in 1976. Investment income was $1153 down at $51,576 and profit on the sale of investments was $2367 lower at $414. However, shareholders’ share of the surplus of the life fund increased ,$4949 to $38,751. Tax (which is based on

the dividend) rose $335 to $10,786. As announced, dividend has been raised from 9.5 per cent to 10 per cent (5c a share) taking $61,660. The profit represents an earning rate of 11.2 per cent on shareholders funds, and 13 per cent on capital against 11 per cent and 12.8 per cent respectively the previous year. Shareholders’ funds rose $21,095 to $724,131, including capital increased by $2BOO to $616,600. The life fund increased $1,225,249, or 44.3 per cent to $3,991,391. Total investment income rose $84,739 to $304,194, representing a return of 7.4 per cent against 7.2 per cent in 1976. Mr Clarke says that an increasing number of policies are being surrendered or cancelled. “Clearly, current [social and economic trends 1 such as rising unemploy-

ment, tighter credit control, and cost of living increases are having an appreciable effect,” he says.