T. AND G. MUTUAL LIFE SOCIETY

Dominion, Volume 32, Issue 72, 17 December 1938, Page 15

T. AND G. MUTUAL LIFE SOCIETY

Record Payments to Policyholders

CONTINUED GROWTH “

Sixty-second Annual Meding

The Sixty-second Annual Meeting of the Australasian Temperance and General Mutual Life Society was held yesterday at the Society’s building, Collins Street, Melbourne.

The managing director (Mr. J. T. Thompson), who presided, moved the adoption of the annual report, revenue account, balance-sheet, and actuarial report, and said:— “Ladies and Gentlemen:

“I have the honour to present the directors’ report and accounts for the year ended 30th September, 1938

Policyholders Increase Assurances.

“The new business written and completed during the year, excluding reassurances, consisted of 161,562 policies, assuring £14,661,184, of which 30,191 policies, assuring £8,764,838, and £2675/16/8 per annum of annuities, were issued in the ordinary department, and 131,371 policies, assuring £5,81)6,346, in the industrial department. This amount of new business was obtained solely in Australia and New Zealand, and was accompanied by a reduction in the expense ratios in both departments. Although the volume of new business completed is not as large as that for 1937, which was an exceptional year for all life oliices, it is, still, a verysatisfactory total. Out of the total of 161,562 policies, over 60,009 were issued among existing policyholders. That in one year such a large number of policyholders should increase their assurances with the society, is a practical demonstration of confidence, which is fully appreciated by the board. “In the accident department 21,869 personal accident and sickness policies were issued, assuring £6,295,875, while, in addition, 7,65-1 policies in the ordinary department were endorsed with accident benefits, assuring £1,521,477.

“The total income for the year amounted to £5,842,940, an increase of £418,062 over last year k This income arises from policyholders’ premiums amounting to £4,545,862, and from interest on Investments amounting to £1,297,078. This interest income, which takes no credit for any interest overdue and unpaid, shows a rate on the mean funds of £4/12/5 per cent., an increase of Bd. over last year’s rate, and represents a very satisfactory yield considering the low market rate of interest on first-class investments ruling during the year.

Record Payments to Policyholders;

“The payments to policyholders, for the first time in the history of the society, have touched the two million mark, qpd this year amount to £2,161,358. Of the total, no less than £1,264,596 was paid away, in the shape of maturity claims to policy holders who have survived for the whole term of their policies. The death claims this year were slightly larger than last year, but the mortality experience in both departments has continued to be exceedingly favourable, undoubtedly due to the great care exercised in the selection of risks.

Large Addition to Policyholders’ Funds.

“The assurance funds have inert ascd to £29,252,711, the addition for the year of £2,384,737 being a record in toe history of the society. I think most of you appreciate the fact that these funds are held by the society solely for the purpose of meeting future liabilities under existing policies as and when they arise. “Of the total assets of £30,32.1,756, more than 59 per cent is invested in Government, municipal, and other local body securities. Such loans were usually obtained from the society for the carrying out of public Works which materially assisted in relieving unemployment, and as a large percentage of the cost of such works was actually paid out in wages, it is clear that the investment of the funds of the policyholders in loans of this class has its effect upon the spending power of the people and the free circulation of money. Sound Investment Policy. “The society’s investments in first mortgages had increased to 23.0 per cent .of the total assets, ths increase having been accounted for, io a large extent, by the numerous loans granted during the year to enable poiicyboiders and prospective policyholders to acquire their owu homes. There is no doubt that in granting loans under this advantageous system, the society '<s not only assisting the building industry but is definitely helping to overcome the present difficult problem of suitably bousing the people. I think that the majority will agree with me that those who desire to leave the ranks of the rent payers to become home owners should receive every encouragement to do so. provided they have the necessary de posit and are in a financial position to undertake such a responsibility. I may add that one of the attractive features of the society's scheme is the provision under certain tables for a free title in the event of the death of the mortgagor during the currency of the mortgage. “The freehold premises account has increased to £2,547,027, the increase being mainly attributable to the completion of tlie society’s Hobart building, and the extension of the head office building in Collins Street. Melbourne. I am pleased to say that the head ogiee extension is making very good progress as the problem of accommodating the growing staff is one of urgency. “Although the amount of the book value of premises is below either actual cost or present day valuation and the buildings'are practically all of recent construction and design, the board has decided as a conservative measure to make a further appropriation from revenue this year of £20,000 as a provision for depreciation of buildings.

“The remaining assets call for no particular comment. As is our usual custom, such items ns overdue interest, agents’ balances, plant, furniture, printing, and stationery, and other non interest bearing assets have been excluded altogether from the balancesheet.

The Actuary’s Report Shows Record Surplus.

"Turning to the actuarial report, yon will see that a 3 per cent, net premium valuation basis has been maintained throughout, and that special provision has been made for such items as immediate payment of claims, suspended mortality, and contingent liability under lapsed, but revivable policies. "The valuation disclosed a record surplus of £944,062. This surplus represents the excess of policyholders' funds over the present value of all liabilities under, existing policies as ascertained by the annual aeuarial investigation. The society, being purely mutual and having no shareholders, the whole amount of the surplus belongs to participating policyholders in both ordinary and industrial departments. lam pleased to be able to announce that, after setting aside £50.000 for actuarial contingencies, the surplus is sufficient to provide, both in the ordinary and industrial departments, reversionary bonuses on the same liberal scale as granted last year.

“The personal accident and sickness department, as T have already indicated, continues to show satisfactory growth, and the premium income in the department is now £153,729. The claims ratio is quite satisfactory, and .in this respect I would like to say that I do not consider that a low claims ratio in this department should be aimed at. One prefers to see that the policyholders actually receive the benefits for which they pay the premiums, and one would prefer the ratio to be high in preference to being unduly low, so long as it is within safe limits, which is at present the experience of the society. In fact, the operations of the year’s working show that, after making ample provision for unexpired risks, unannounced claims, and guaranteed bonuses, the actuary has been able to recommend the granting of extra benefits on existing contracts.

“In previous addresses I have drawn your attention to extra benefits beyond those set down in the actual policy contracts, which the society has been able to extend to policyholders, aud I atn pleased to be able to inform you that it has been found possible to continue these benefits this year.

Extra Benefits Continued.

“One of these extra benefits is the society’s lien revival system, whereby industrial policyholders have been enabled to bring their policies into force again without the payment of any arrears of premium and policyholders under 33,145 were so helped last year.

“The visiting nursing service, available only in the metropolitan areas, has continued its excellent work, aud has given full attention to the needs of all policyholders who found it necessary to avail themselves of this privilege. The service is staffed by fully trained nurses, who give visiting nursing service when required, and during the year they paid approximately 30,000 visits. Both in its effect in improving the society’s mortality expeiieuee, and in getting the assured back to work more quickly, the service must be of great value to the society and to its policyholders.

“The waiving of future premiums in the Industrial Department in cases where the life assured has become permanently and totally disabled has been continued, as also the practice of granting fully paid-up policies free of future premiums in the case of policyholders who have attained the age of. SO after paying at least 10 years’ premiums.

“The board has found it possible to continue these extra benefits this year, but, as I have already pointed out, there is no provision for such in the actual policy contracts, and the board does not at any time guarantee their continuance.

Society’s Strong Position. “Ladies and Gentlemen.—l have now covered the most important features of the accounts, and I am sure that yon you will agree with me that the results for the past year are exceedingly good under conditions which haye not been altogether favourable. The completion of £14,661,184 of new business in 'Australia and New Zealand, the expansion of the Accident Department, the record addition to the funds of £2,384,737, are all notable achievements. I am sure, too, that policyholders will be completely satisfied with the financial position as disclosed in the revenue account and balance-sheet. Although the rate of interest for new investments continues to be lower than it was a few years ago, the rate of £4 12/5 per cent., which the society is now earning on its accumulated funds, shows a wide margin of safety over lhe valuation rate, and the undoubted strength of the society's position should be an attraction to all those contemplating an investment in a life assurance policy. “In conclusion, I should like to pay a tribute to the excellent work of the staff during the past year. We are very proud of our representatives in the field, and appreciate their splendid efforts under adverse conditions, and their untiring devotion to the requirements of the policyholders. 1 wish to convey to all members of the staff, both indoor and outdoor, the board’s deep appreciation of their capable and loyal service, which is to a large degree responsible for the society’s continued progress and success.”

The retiring directors (Messrs Robert McDonald and William Forster Woods) and the retiring auditors (Messrs. A. MeK. Hislop and C. A. Holmes) were re elected. —JAB.A.