NATIONAL MUTUAL LIFE ASSOCIATION.

Dominion, Volume 21, Issue 83, 6 January 1928, Page 11

NATIONAL MUTUAL LIFE ASSOCIATION.

INCREASED BONUS The 58th annual meeting of members of the National Mutual Life Association of Australasia, Ltd., was held at the ehad office on December 21. The chairman of directors (Mr. George Swinburne) presided. In his opening remarks the chairman referred to the loss sustained by the association through the deaths of MessrsAndrew Newell and Edward Trenchard, directors, and Mr. Arthur Langford, manager of the Adelaide branch. Mr. Newell, he said, has been a director of the association for 47 years, and chairman for 17. Mr. Trenchard had occupied a seat on the board for 35 years, and had succeeded Mr. Newell as chairman in 1926. Mr. Langford had been in charge of the association’s affairs in South Australia for 43 years, and he was highly respected there. PROSPEROUS YEAR. Moving the adoption of the directors’ report and balance-sheet, the chairman said:— The report, which is in your possession, shows that the association has had a prosperous year. The new business transacted amounted to £8,234,713, •which is £470,000 more than the previous year’s figures. The whole of this new business, you will understand, is what is called ordinary as distinguished from industrial business Industrial business may be defined as assurances for sums not exceeding £25, the premiums on which are received through collectors. The cost of collection is necessarily high, and falls on the policyholder. After very mature consideration, the directors are determined that, unless they can discover some more economical way of conducting it, we will not undertake industrial business. LARGER INCOME. The premium income is £199,802 higher, and again includes a large amount of £353,212 of single premiums. This kind of contract continues to be an attractive form of investment to some people. The net interest is £105,413 higher although the amount paid for rates and taxes during the year, and charged in our accounts against interest, increased by £9827 The amount shown in the revenue account, £1,420,575, is equal to 5.54 per cent, ot the mean amount of the assurance fund. This rate is .035 less than the rate of the previous year. This difference is due to the fact that we had some large amounts invested in our own new freehold properties, which were only partly productive during the year. Our Brisbane building is still in the contractor’s hands, but it is far enough advanced to enable us to occupy the portion which is reserved for the accommodation of the branch. The total income for the year is £4,378,798, and shows an increase of £298,171. Death claims of £675,212 are £6105 higher, but we had some four and a half millions more at risk than we had in the previous year. The rate of mortality amongst our members was very light—it was only 58 per cent, of the expectation. The average duration of the policies under which claims were made was 19 years. Of the amount paid no less than £143,080 represents bonus additions to the original sums assured. The amount paid to members whose policies matured—£793,l2l—includes £178,312 of bonus additions. FUNDS STRENGTHENED. The new business expenses and the ordinary expenses of management are about the same percentage of the ordinary premium income, by which I mean the income from any single preniivni, has been omitted, as in the previous year. The percentage is 14.6 per cent. The assurance fund has been increased during the year by £2,123,697, which is £148,492 more than the amount of the increase in the previous year. The principal changes in the items in the balance-sheet, which are the result of the year’s transactions, are an increase of about £1,041,000 in the loans on mortgage, and an increase cf about £688,000 in the amount lent to our members on the security of their policies, in some cases with collateral security. There is an increase of £141,000 in the properties acquired by foreclosure which is due to its having been considered advisable to define the legal position of properties which have been in our hands for some years. House property, which means our office premises at head office and the branches, has increased by almost the same amount of £141,000. This is due to our purchases in London and Bloemfontein, which have been reported, and to the progress of our building operations in Brisbane. From the nature of our business it is not possible to show the result of the year’s transactions by a brief summary of the revenue account ’and balancesheet. Every policy issued is a contract to pay a certain amount on the happening of a specified event. The premiums which we receive as consideration for these contracts are based on three assumptions: Firstly, that the funds of the association will be invested continuously so as to yield a return of 3j per cent, per annum; secondly, that the rate of mortality amongst the persons assured will be as shown in the tables based on the experience of assured lives; and, thirdly, that the business will be managed economically.

1 have referred to these three points in my comments on the revenue account.

Funds, instead of vielding 3| per cent, have yielded 5| per cent. The rate of mortality on the assured lives is only 58 per cent, of the expectation, and our total expenses amounted to only 14.6 per cent, of the premium income. We have then strong proof that the year’s results are satisfactory, but this cannot be definitely determined until the nresent value of the associatipn’s liabilities under the contracts which were in force at the end of the year has been ascertained. INCREASED SURPLUS. I am glad to be able to inform you that the valuation which has already been completed discloses the fact that we have an increased surplus in the assurance fund, which will enable us to declare still larger bonuses to our policyholders than we declared last year. You have been reminded more than once front this chair that the only people who gain any advantage from the success of the association’s business are its policyholders. Every penny that we receive over and above the amount required to meet our liabilities belongs to them. But the association benefits not only its policyholders, but the whole community. Bv accumulating the comparatively small contributions of the individual it makes them fruitful and available for the development of the country.

Our business is drawn from all classes. The amounts assured under policies issued during the year range from £5O to £50,000, the average amount assured having been £4BB. Our funds at the end of the vear were widely distributed. Of the total of £26.000,000', over 40 per cent, is invested in Government and municipal securities. Of the amount tent on mortgages, 40 per cent, was on the security of broad acres, 38 per cent.

A machine that can smoke three dozen pipes at once now saves the smoker the distasteful job of “break-ing-in” a new briar or meerschaum. Equipped with mechanical mouth ■ and lungs it “ages” a pipe in a way that would ordinarily require weeks of steady use.

on city properties, and 22 per cent, on suburban properties. £4,424,418 of the association’s funds has been lent to policyholders on the security of their policies. SOUND MANAGEMENT. It is with no feelings of convention that the directors, on behalf of the policyholders, thank the staff for their consistent good work given to the association The results show the fine work achieved. The motion for the adoption of the report and accounts was seconded by Sir John Macl'arland and carried unanimously. Mr. George Swinburne was re-elected a director, and Messrs. 11. C Tudehope and W. M. Jarvie were re-appointed auditors.—(Published . by .arrangement.)