A.M.P. SOCIETY

Dominion, Volume 34, Issue 190, 9 May 1941, Page 9

A.M.P. SOCIETY

Report Of Directors

EXPENSE RATES DOWN; RESERVES INCREASED

The ninety-second annual report of the directors of the Australian Mutual Provident Society states that new business completed in the ordinary department in 1940 comprised 41,900 policies, assuring £16,927,863. and 329 annuities for £14,750/3/3 per annum. In the industrial department 99.587 new policies were issued assuring £6,083,792 z 9/-.

Tite investment and contingencies reserve funds have been increased by £500.000 to £3.000,000. provision for accrued taxation has been increased by £200,000 to £500.000, and the book values of the office premises and other assets have been further written down by a sum of £244,140/7/7. In addition, the special reserve for contingencies made in the valuation balance sheet of the ordinary department has been increased by £550,000 to £1,500.000.

The total business in force (original sums assured and bonuses) has now increased to £329,046,858 in the ordinary department and £56.948,551 in the industrial department, making a grand total of £385.995,742.

Claims by death in the ordinary department amounted to £3.219.450/3/8. including £1,235.159/9/10 for bonus additions, after deduction of amounts which had been reassured. Endowment and endowment assurance pole cies matured amounting to £1,712,235 10/8, including £552.374/4/- fo_r bonus additions. Policies assuring £5,864.102 6/2 became void from other causes, and annuities amounting to £SS2I/6/- also became void. Claims by death and maturity in the industrial department amounted to £1,389.587/12/5. Claims under all headings show a substantial increase over the previous year. <

The rate of interest realized on the mean funds (including the fidelity guarantee fund, the investment and contingencies reserve funds and the provision for accrued taxation) was £4/7/3 per cent. This rate, in the face of existing conditions, can be regarded as very satisfactory, specially as the valuation of the whole of the society’s policy contracts has been based on an interest rate of 3 per cent, per annum.

The total assets of, the society have increased from £122,495.075 to £I2S.645,170. These embrace a wide portfolio of securities and the society’s investments in various loans to the Commonwealth and States of Australia, to New Zealand and other Dominions, to Great Britain, and to local government and other public bodies in Australia New Zealand and other Dominions, amount in all to £75,302,514/13/-.

The actuary’s report, a copy of which will be supplied to any member on application, shows a surplus of funds over liabilities in the ordinary department (after providing for the special reserves mentioned above) of £2,190.052 3/3, out of which £2,053.401/8/3 is to be allotted for distribution among the participating policy-holders. This will provide reversionary bonuses of about £3.548,000.

The surplus in the industrial department. which is to be distributed among participating policy-holders, is £409.717/14/7, providing reversionary bonuses amounting to about £550,000.

In the ordinary department, commission, expenses of management, and taxes absorbed respectively 4.56. 6.75. and 4.34 (a total of 15.65) per cent, of the premium receipts, excluding purchase money for annuities, the corresponding percentages for 1939 being respectively 5.62, 7.23 and 4.25 (a total of 17.10). Tn the industrial department, commission, expenses of management and taxes absorbed respectively 16.16 10.25 and 1.53 (a total of 27.94) per cent, of the premium receipts, the corresponding percentages for 1939 being respectively 16.95, 10.90 and 1.53 < ii total 01’29.41). Taxation paid during the year in the two departments combined amounted to £389,184/13/3 as against £364,929/1/6 paid during 1939. It had been hoi>ed that Mr. D. A. Ewen, ir member of the New Zealand Branch Local Board, would have attended the meeting in Sydney in person, as the New Zealand branch delegate, but an unexpected curtailment of transport facilities caused the cancellation of his passage at the last moment.

In the circumstances it was arranged that the following message from Mr. Ewen should be read to the meeting.as indicating his support for the motion for the adoption of the annual report. “The annual meeting will be held in the shadow of grave events —events threatening the safety of our Empire, of our ideals, and our very institutions. It is symptomatic, perhaps, of the resolution with which the British peoples everywhere >a re facing their difficulties that we should be able to come together much as usual, and to learn, moreover, from your report the very satisfactory manner in which our society is carrying on, and even expanding its business, in such adverse circumstances. The members of the principal board are to be heartily congratulated on the results of the year’s operations, representing, as they do, a most solid achievement for all those actively engaged in the prosecution of the society’s affairs, as well as a source of substantial satisfaction to all onr policyholders.

“In this very pleasant result, I am glad to be able to report that the New Zealand branch has contributed its full share of'the society’s general progress To the influx of new business during 1910, New Zealand has supplied new sums assured tn the ordinary department amounting to £4,167,518, together with an additional sum assured of £646,880 through the industrial department. This new business is equivalent to an average amount of £3/3/9 per head of the Dominion population (ex eluding Maoris), and was secured notwithstanding the absence overseas on active service of many thousands of young men who, in ordinary circumstances, would form the backbone of new membership. A complementary activity in the building up of membership is the conservation of the business already in force, and. in recent years, the work has had increasing attention. Business goes off the books in the main through death claims and maturities, and by policies lapsing or being surrendered. Willi Hie continual expansion of business comparative figures for deaths and maturities tend Io Increase' year by year, and conservation work must be concentrated on (he other, and preventable, forms of loss. In the 1939 report, Hie branch was able to show a reduction by £231.000 in the business void from all sources, and during 1940 Illis happy result was improved to the extent of a further £244.996. The decreasing figures for voids improve the rate for net inerfase, i.e., new business less voids, and indicate the high degree of stability of our business. The ordinary department business alone in force at the end of 1940 represented an average sum assured of £4O/3/9 per head of population (excluding Maoris), a telling advertisement of Hie service being rendered to the people of New Zealand by tile society and a measure of the support being accorded there. “During the sear. the funds of the hrunrh i ncrv.‘i>’ ,, i b\ .ipproximntcl.v

£1,401,000 to nearly £21,837,500 and satisfactory avenues have been found for investments in the Dominion itself. By this means the society is enabled further to contribute to the well-being of New Zealand by supporting Government and local body loans, and by making advances on mortgage of land and other first-class securities. Arrangements have recently been completed also to co-operate with the Wellington City Council in financing a housing scheme designed to relieve the acute housing shortage in that centre. "Seasonal conditions, in the year under review, have been generally favourable in the Dominion as a whole, the lambing in particular being most satisfactory. The marketing of pri nurry produce is affected, however, by curtailment of shipping services and the reduction in insulated bottoms will be seriously detrimental to lite export meat trade. War conditions have given a fillip to the development of secondary industries, but these have not advanced as yet to the stage where the Dominion can be indifferent to the predominating influence of its primary producing economy. New Zealand must remain, therefore, vitally interested in the finding of adequate solutions to these war limo difficulties and the degree of prosperity t<> lie attained in the it ediate future "ill bear a close relation to the success a I lending these efforts. "In its representation, lite branch has been handicapped by tiie enlistment of many experienced field men. and the indoor staff has been depleted for the same reason tint! to an even greater extent. Whilst these losses have attained almost embarrassing proportions in some centres, satisfactory or temporary ;UT:nig(Mu<*ii(s have Ih‘vii made in all eases, and with the loyal co-operation of those wtio remain, it is confidently expected that such difficulties will be minimized and a fully adequate service maintained.

“I can assure you, Mr. Chairman, in conclusion, that the society is in a most sound position in New Zealand ami Hiat the future may l>e faced with quiet confidence.

"I have very much pleasure in sup-poi-lina the motion for tin' adoption of the ninety second annual report.”— P.B.A