T. AND G. MUTUAL LIFE

Evening Post, Volume CXII, Issue 148, 19 December 1931, Page 13

T. AND G. MUTUAL LIFE

SOCIETY,

ANNUAL MEETING.

SOCIETY'S STEONG POSITION.

There was a large attendance at the fifty-fifth annual meoting of the Australasian T. and G. Mutual Life Society held yesterday in the company's building in Collins street, Melbourne. Tho chairman (Mr. J. T. Thompson), who moved tho adoption of the annual report, revenue account, balance-sheet, and actuarial report, said:— Gentlemen, —I have pleasure in presenting the directors' report and accounts for the year ended 30th September, 1931. Tho new business written during the year in Australia and New Zealand comprised 21,074 policies, assuring £5,421,427, and £1701 per annum of annuities in the ordinary department, and 115,752 policies assuring £5,031,749 in the industrial department, making an aggregate in botli departments of 136,826 policies assuring £10,453,176. In the accident department the society issued 2600 personal accident and sickness policies—more than twice the number for the previous year—assuring £1,381,650, and 4397 of our policy-hold-ers in the ordinary department showed their recognition of the vahte of accident benefits by arranging for the endorsement of their policies with accident benefits assuring £1,272,106. YEAR'S OPERATIONS. Considering tho conditions prevailing during the year of, operations these results are regarded by your board as highly satisfactory. I am pleased to add that a fair percentage of the new policies issued for the year were applied for by persons already assured with tho society, thus showing in a practical manner their appreciation of the society's efforts on their behalf. The income for tho year increased to £3,908,292, which is £52,257 more than the income for tho previous year. Of the total £2,972,892 was obtained from premiums and £935,400 from interest. INCREASED PAYMENTS TO POLICY-HOLDERS. On the opposite side of the revenue account the first itom of importance is the amount paid to policy-holders, £1,697,297. The mortality experience in both the ordinary and industrial departments continued to be favourable, tho increase in death claims being only £19,284 in the ordinary department and £10,511 in the industrial department. DECREASED EXPENDITURE. With regard to the expenditure for the year, not only the extension of business expenses but also the expenses of conducting the business showed a considerable decrease compared with tho corresponding expenses for the previous year, and I am pleased to be able to announce that the expense rate has been reduced in both the ordinary and industrial departments. The amount paid away in'taxes, and licence fees was excessive. Representations have, however, been made to the Government to the effect that if the present is not an opportune time for granting immunity from taxation to life assurance societies, at leasts a change in the basis of taxation is essential. This matter is still in abeyance, but I am very hopeful that some of the injustice which policy-holders have had to bear in the past will be removed. SOUND INVESTMENT POLICY. The assets of the society now amount to £17,110,588, compared with £16,068,017 a year ago. The sum of £10,657,123, or 62;3 per cent, of the total assets, has been invested in, Government and municipal securities, chiefly the latter class, a very fair percentage having been invested in the Dominion of New Zealand. Loans on mortgage amounted to £2,893,900, only £67,373 more than the previous year's figures. As I have stated on previous occasions, all investments made by the society are subject to tho closest scrutiny of your directors, and the greatest care has always been exercised in selecting securities of only the highest grade. The board is fully; satisfied that the investments held by the society are in a sound condition. It also considers that the disposition of the assets into tho various classes of s,eeurityj as listed in the balance-sheet under, review, has been such as to ensure the greatest possible degree of safety to the funds of the policy-holders. I might usefully add that debentures of the Government and municipal class are not acquired by the society with a view to realisation on the Stock Exchangej and that their value on maturity cannot be affected by fluctuations in the market price from time to time. The item, freehold property, shows an increase, chiefly due to the reconstruction of our Sydney premises, rendered necessary through the widening of Park street by resumption. The comparatively low book value of the society's freeholds is due largely to the fact that the sites on which the buildings now stand were originally purchased at very favourable market prices, and partly to the board's policy of writing down the book value in the past whenever possible. However, wo are living in uncertain times, and as the trend of future values is still obscure the board decided that a larger amount than usual should be written off properties this year, and resolved to allocate £100,000 for that purpose. Nono of the remaining assets calls for special comment, but I would direct your attention to the fact that in the balance-sheet no credit has been taken for overdue interest or for such non-interest-bearing assets as agents' balances, printing and stationery, furniture and plant. The reason for this is that such items have been written off from year to year. , The board has also decided to transfer i£150,000 of tho assurance funds to the reserve for contingencies, increasing the amount of contingency funds to £324,932. This step is justified by tho present state of the real property market, if for no other reason. It may be that property values, have fallen only temporarily, but it must be realised that at present the margins for existing loans on mortgage cannot be as wide as formerly, and consequently the society's reserves should be strengthened. In augmenting these reserves to the extent indicated the directors are convinced they have acted wisely in the interests of the policy-holders. Tho interest rate for the' year calculated on the mean funds was £5 16s lid per cent., leaving out of account any interest which has been earned but which is overdue. This is a very satisfactory rate considering tho desirable nature.of the assets, and is only 4d per cent, below the rate for tho previous year. ADDITIONAL BENEFITS TO POLICY-HOLDERS. The society was able, I am glad to say, to continue the operations of its various services to policy-holders, these services being additional to benefits provided by tho contracts entered into botweon the policy-holders and the society. The lien revival privilege, whereby industrial policy-holders arc able to bring into force policies which are out of benefit without payment of the arrears in cash, was very largely availed of, and I am pleased to bo able to tell you that 66,898 policies were restored in this manner for necessitous policy-holders. In addition, the society granted the waiver of all future premiums to breadwinners assured in. the industrial department who became, permanently and totally disabled during the financial year. The nursing service

has continued its good work, 4 'Wing the year one policy-holder in every 86 in the areas in which the, service operates receives attention. This welfare work, ia addition to being of great value in restoring sick policy -holders to active life, has definitely improved the society's mortality rate. This influence has been felt in the ordinary department, where a free periodic medical examination has been offered at quinquennial intervals to policy-holders. Many of, these examinations have disclosed defects of which the policyholders were unaware, and the timely discovery has enabled them to avail themselves of the latest knowledge in preventive medicine. In further consideration for, tour policy-iholders we have continued waiving future premiums to all policy-holders who have attained the age of 80 years in both ordinary and industrial ' departments, : provided they have been insured for 25 years. This waiver of premium has, we are convinced, been of veiy great value to these policy-holders in their old age. Gentlemen, I think I have referred.to all the important features of the accounts with the exception of the actuarial report, to which I will come later, and I hope you feel the same satisfactioii as I dp with the results which have been achieved during one of the most difficult years I have known. The completion of such a large volume of new business shows the calibre of our representatives in the field, and also shows that the people recognise to-day,, perhaps as never before, the necessity of life assurance. Yet we should not be altogether surprised at the public's growing appreciation of life assurance, for what could be a safer investment than a life assurance policy in a wellconducted society? Particularly to those who have a wife and children dependent upon them for support, I would say this is an appropriate time for considering whether their investments in different directions are really safeguarded for the protection of their loved ones. I would, urged them to consider the possibility of some of those investments turning Out badly and not furnishing the protection which they had in mind when the investments were made. If that possibility .exists there is every reason why the question of further life assurance should ibe :coasidered. Such a step would offer relief'

from some of. the responsibilities ■of making individual investments. The savings of policy-holders are invested in gilt-edged securities, selected with the greatest care and skill, and with the main object of preserving the capital intact, so that all liabilities under policies may be met in full as claims arise. A life assurance policy may not give quite as high a return as could, perhaps, be obtained on some other occasional individual investment, but the risk of capital losses would be obviated, a good return, would be secured together with perfect safety, and the dependants of the.assured would be better protected. STEONG VALUATION BASIS. In introducing tho subject of the actuarial report, I should like to say that the society has been accumulating actuarial reserves in. the event of a change in the basis of valuation to a 3 per cent, interest basis becoming necessary. , Until last y.dar 3J pei cent, was the assumed rate for the industrial department and for a few tables in the ordinary department. This year, however, the actuary has recpminen.ded, and the board has approved of, the' adoption of a 3 per cent, net premium basis throughout both departments. This, of course, strengthens the society's position, and enables the society to face the prospect of reduced interest earnings with . equanimity.; The surplus amounted, to £626,873. . After setting aside £50,000 of this surplus for actuarial contingencies, and after providing for reversionary bonusbs and other extra1 benefits to participating policyholders £81,135 is carried forward to next year. In the ordinary department the bonuses will be on a slightly lower scale than the previous year's scale. In the industrial department the bonus scale has not been changed. As you all know, the Teduetions of interest provided for in the various financial emergency Acts will have the effect of considerably reducing the interest from existing investments, and this cannot fail to bring about a reduction in the'"bonus s.cale- of all companies bo affected. .As far as possible, this society has taken steps to mitigate the effects of such reduction in the interest rate. I will refrain from criticising the legislation •which, has been passed, except in bo far as to say that I hope

we have heard the last of interference with private contracts.' Unless it can, be felt that future private contracts ■will be free of such interference as we have experienced, the recovery of Aus-> tralia will certainly be retarded. As to the future,.'! would say thafs signs of a* slight improvement are already manifest, and I would express the hope that we shall experience a; gradual increase in the prices of our primary products, because this country; will thus be considerably helped in its recovery. Personally, I strongly believe that within the next 12 months we shall succeed in arranging agreements which will have the effect of greatly improving our trade relations within the Empire, and that such. an understanding will be of immense value to the workers of Australia and New .Zealand. . • ■ -■ .: In conclusion, I should like to .ex-" press to the whole of the outdoor and indoor staffs the board's appreciation of their loyal services during the past year, which have contributed in no small degree to "the excellent results disclosed in tho report. The retiring directors, Messrs. W* Forster Woods and A. B. Stewart, and the retiring auditors, Messrs. A. M.K. Hislop and C. A. Holmes, -were re-elect-ed. (Published by Arrangement.)