Profit boom for National In.

Press, 28 September 1984, Page 15

Profit boom for National In.

PA Dunedin The National Insurance Company ( of New Zealand, Ltd, more than doubled its after tax profit in the year to June 30.

Rewarding shareholders ahead of the Budget, the directors have declared a second interim dividend of 9c per share, tax-free rather than recommending a final dividend.

Although the 1983 year contained only 10 months due to a changed balance date, the latest result has been affected by unusual liabilities.

The consolidated profit of $10,530,000 was 110 per cent higher than last year’s $5,006,000. Gross premiums written were up 30 per cent at $180,882,000 ($139,534,000) and net premiums were up 16 per cent at $133,287,000 ($114,928,000). The underwriting loss increased 38 per cent to $9,038,000 ($6,541,000) but investment income rose 38 per cent to $13,241,000 ($9,568,000).

Realised investment gains of $4,205,000 contrasted with $821,000 the previous year and earnings from associate companies rose 148 per cent to $1,244,000 ($502,000).

The operating profit was up 118 per cent at $9,570,000 ($4,382,000). The latest year also benefited from a $56,000 profit on property sales and from a 45 per cent improvement in exchange fluctuation ($904,000 against $624,000).

The directors comment that the results show a significant improvement in investment income, increased gains on realisation of investments and associated company earnings. “The substantial loss in London, which was reported earlier prevented an improvement in the underwriting result,” they say. “The agency there was closed late last year and full provision has been made in the accounts for the estimated run-off of liabilities.”

Total assets of the group have increased to $261,603,000 ($223,504,000) and shareholders’ funds have increased to $54,195,000 ($45,171,000). Issued capital following a bonus issue on August 17 is $16,871,251, comprising 33,742,503 shares of 50c each. Devaluation of the new dollar after balance date will result in a one-off exchange gain of more than $7 million in next year’s accounts, the directors say. They do not intend to recommend any further dividend to the annual meeting. The second interim, in which the three-for-four bonus issue made in August will participate, brings the total for the year to 23.8 c per pre-bonus share, compared with 20c last year. The second interim will be paid on October 26. The annual meeting will be on November 29.