NATIONAL MUTUAL LIFE ASSOCIATION.

Dominion, Volume 1, Issue 193, 9 May 1908, Page 6

NATIONAL MUTUAL LIFE ASSOCIATION.

ACTUARIAL INVESTIGATION. ' An extraordinary ; general: meeting of tha National Mutual Life Association of Australasia, Limited, . was.- held at Melbourne on. Friday, April: 3, to. receive- the report of. the actuary (Mr. ,E. : J. Stock) on the investigation of the affairs of tho association as at September;.3o, 1907, and the.report of the directors-'thereon. In the unavoidable - absence,' through. ill-health,- ; of' the chairman of directors and, managing director (Colonel J. M..,Templetpnj, Mr,. Andrew, Newell, a member ,'of the" Board; " presided over the proceedings. In moving tho adoption-of the two. reports mentioned (printed . copies were '• distributed amongst members),, the. chairman referred to their - salient features.,'''! He said: —. . ■ ... It is a keen disappointment, to thei'chairman (to whom the association owes so.much) that ho .is .unable to .be present on such an important occasion, but liis medical advisers will not permit liis: attempting to do so, though at his' residence : ho has taken part in tho preparation of the report of-,the directors, Which you. will note Jbears his signature. Meetings such as these'are-peculiar to life assurance companies, and .that' ia owing to the nature, of the", business.. Many of our contracts extend over the life-tima of the individual, and soine of the payments we have undertaken to make will, we know for certain, not fall in-during ■ the'next half century. On the other hand, many of the payments that are now due aiumally to tha association 'will' continue' to be made for moro than 50 years hence.' The.-reports which are submitted to you at the annual meetings inform you as to the : actual transactions of each 'year, the policies we, have issued, the moneys we have received, and paid away under different heads. But to find out the real, position of . the association and tho" progress, we are : .miking, it is necessary that we should know the raluo of the'obligations we have entered'into, and of the assets that wo havet acquired. Tho object of the pariodical -investigations is to ascertain the values of these.liabilities, riskij,; and assets, as they are called ; in our articles of association. To value contracts extending over 50 years or more, and/depending for the most part' on tho duration of human' lives, seems to the lay mind an impossible task, but actuarial science has ; made it easy to those who know how to handle its tools. Tho Voluminous reports and statements that will , be-sent to members; and a summary of which you have now before you, contain tlio,results o? such'a valuation: What there was to valiii was set out , in, detail, the method of valuation, and the results, of the valuation, are also fully stated.- The form in which tho report, is drawn' is perscribed by vActs of Parliament of the various States, and. copies, arc .filed with -the RegistrarGeneral, so = that they -may be inspected- by anyone interested. : I should' like' to call your attention, first, to, what,.there, was. to value. This you,will find in the.summary in-your hands. . . There were 77,174 policies. The 'amounts payable 1 by ;the . association under these polioies were over, £19,600,000, including over £1,000,000 that ..had. -been added to the original sums assured by: the association as bonuses. Over £20,000 was also payable' to annuitants. ■ On 'the other hand, the amounts payable, to -the association as assuranco , premiums under-', thesa policies were -£631;204:,.

a comparison. ; . By comparing these figures. with those • pra. sentod to you threo-years ago, , you-can form an idea of the progress the' Association is miking. I ,;you will, find ,we have/now in force over; 15,000 ,moro policies than we had three years agoi the-sum 'assured*''is ■> in; creascd by o morojithani £4j000,000; and-.the' annual prqmium ' income . by: more than £150,000-in ,the three . years, v The exact figures you will find' in /the. actuary's, report. This _ycry largo increase, in the - business is, I think, .very satisfactory,r'indeed. 1 - .(Heaiy hear.).. The method of valuation is largely a technical matter, and ,I T do not-: lmow that! I can add anything to..' .the'.''information contained/in iho report and 1 schedules..; Of the results,' I need call your attention/ to .only three items, or, perhaps,-four'The value of tho liabilities and risks, that is, of. the sum assured and bonuses,; which ;i5.,£10,199,219 2s;; tho valuo of the-assets represented by tho future, premiums payable to ihe.'Associa-tions-after acducting.au amount necessary to provido for expenses and unforeseen contingencies, which is. £5,075,416,15.! The differonco between tlieso liabilities and assets, or what is called the net liability,' is £4,523,803 Is.** That may be taken as what the. Association owed, or was liable.for,, on 30th' ber' last, and-to ascertain .that : was the object of. tho valuation, which/ has- taken some moiiths 'of laborious' work.' Having 'found this result, the next things is to see what funds tho* Association has to meet its liabilities. These funds you wW; seo ,by the consolidated revenue account amounted to £4,844,002 9s. 6d., so that we' have had not only sufficient/to cover our liabilities, but £320,199' 7s. 6d. more than sufficient!. ; .•'/ ,' ' SURPLUS.. V

. This amount of £320,199 7s. 6d.,' therefore; is the surplus that' is available,' and is. the absoluto property of the members.(Hear;-, hear.) The directors have desided to at once allot £317,000 of, this- amount, amongst the policy-holders as a bonus. We are aware, of' course, that there is no'one else who has any vight to participate in tho'surplus ; _wholo of it-belongs to'tho ■ policy-holders. It is not. ono of. tho objects of the Association to make profits or to dcclaro bonuses. As far-as I am -.aware, that is not-tho .object of , any iu-. st-itution which is founded to conduct life as-, sura'nc'o- on' tho mutual principle, which .wo, claim to do, in its purc-st form. Bonuses are simply returned to policy-holders of the amount paid by them over and -abovo the actual amount that tho assurance, has-beon found to hayo cost tho Association. If it wore possible', which it is not, to foresee all sorts of contingencies, it would also be, possible to charge a premium that would exactly provide for a-H behefits arid expenses.... Then there would bo no bonuses, and we would not bo called "together for such an occasion aa this.' (Applauso.) "'■" Sir. Walter Madden, who seconded the chairman's motionj said lie desired. to express, on behalf or, the board,"how much they, regretted tho' absence that day of Colonel Tem'pleton. (Hear, hear.),,. They all felt sure that bis" inability to attend, was a matter for very great regret'to that. genv tleman. As . to,'tho -associatidn's-jbusihessj''. it could be stated,' ;! without, .exaggeration,, that it was increasing by leaps and bounds'.: It might also bo, stated that tho association had now won 'an assured '■ and"'.'prominent '.- place in the assurance world, from, whatever point of view they might look at'the matter. (Hoar, hoar.) Assuranco business naturally, divided itself into two parts—ansuraiico: and investments. The chairman- had spoken at length regarding the first part, arid he (Mr. Madden) would confine himself to question of investments,'upon which the success, ' of tho institution ,so largely depended, and which gave such great room for good management. The' figures before thorn showed, in quite a remarkable way, that the investments the association had- been managed with '.-signal success. Ono or two figures would illustrate_ that plainly. The basis upon which thoir calculations wero ' made was a rate of £3 10s. por cent., but ..tho association had earned £4 13s. Sd., and the difference between these figures showed. on their total funds at present a surplus ; of £60,000 per annuA. That was something to be proud of. (Hear, hear.) Nor had'it been attained by any undue straining; for.higli interest on indifforent-security. On tho ' contrary, quite , a different plan, had been adopted,, and-safety in dealing, hai always been t.beir. motto.-- He wished .. 'to congratulate tho members upon the-strit-ing success of tlm association, and'to: wiih them ninny happy and prosperous rcton-rn .of this, which might nrpperly '< bocallcd; l distribution-day. (Applause.)"' The motion was agreed to unanimously.— "Melbourne Argus," (We are informed by the General Manager for Now Zealand (Mr. Orton' Stevens) that tho bonus certificates were, posted yesterday, and should bo iu the hands of the majority .of the policy-holders to-day J '-, 8984