AUSTRALIAN MUTUAL PROVIDENT SOCIETY

Evening Post, Volume CXXIII, Issue 108, 8 May 1937, Page 13

AUSTRALIAN MUTUAL PROVIDENT SOCIETY

Annual Meeting

NEW ZEALAND'DELEGATE'S

SPEECH

The . New Zealand delegate, Sir William Hunt, at the annual meeting of the A.M,P. Society, held in Sydney on May 7, 1937, gave the following address: — : It gives me pleasure to be here today as the delegate from.the New Zealand branch, to support the motion for the adoption of the eighty-eighth annual report, to refer to the satisfactory part played by the branch in achieving the magnificent total of new business for. the past year to which the chairman has referred in his interesting address, and to deal also with other matters affecting the society's activities, on the other side of i the Tasman. It so happened that I was the visiting delegate from New Zealand in 1935, and were it not for the fact that I am now on my way to England on a business trip, the.honour of representing the branch today would, no doubt have fallen to one ofi my colleagues on the local board. ORDINARY DEPARTMENT ■■■ '• NEW BUSINESS. /-.' ■ -In an age when record-breaking- of one description or another seems tc be a feature of daily affairs,' it is a gratifying and reassuring thought that such a beneficent object as life assurance—nd a in particular that as offered by the A.M.P., Society—should find a place on the scroll of events. So far as we in New Zealand are concerned, the past year closed with our ordinary department ne.w business register showing the unprecedented total of over five and a half millions, which is an increase of no less htan oneand a half "millions over" the previous year's figures, and representing about £3 14s 8d a head of the total population of. the Dominion. It has been well said that life assurance figures are a good barometer of the timev the figures rising and falling in sympathy with economic conditions, and. our splendid new business yield in'many respects reflects the trade recovery which, has taken place in the Dominion. '•■ Special attention has, been paid sto the conservation "of existing- business during the year, with . the most encouraging results;, and although our society has the lowest percentage of preventable waste business- , of-, any office in New Zealand, no effort is being spared. ■to reduce ; this amount even further. ' . INDUSTRIAL DEPARTMENT. From the standpoint of incidence of population, sNew Zealand ..is perhaps not so fortunately placed as Australia" so far as the writing of industrial assurance is concerned. In Australia you have a very substantial portion of the population living in..the metropolitan areas and engaged largely in secondary industries which; provide a fertile field for the writing of industrial assurance, whereas in New Zealand probably a larger projection of the population is occupied in/primary pursuits, resulting in a more.' scattered field of canvass. However/ it is pleasing; to note that' our industrial new business and net increase figures were both well in excess of the previous record figures established during 1935, and, are a haopy augury for the further development of this side of /the society's activities in the Dominical. . ; EXTENT OF SOCIETY'S BUSINESS AND INVESTMENTS. .IN" N.Z. . The society might well be regarded as a national institution in New Zealand, not only by reason .-of the fact that it holds on its books over 40 per cent, of the total life,assurance in force in the Dominion, but also from the standpoint of its' financial stake in the country. The New Zealand branch assets (all of which are invested in the Dominion) have now reached the very substantial total approaching twenty million pounds, of which loan on mortgage investments represents some three million, Government securities three and a half million,*anid loans to public bodies and municipalities approximately nne million/ Our securties are in a sound position, and. those of the farm accounts which, have required a certain amount of "nursing" during the depression years ,are, in the majority of cases, now standing on their own feet. .-, ■ .■-. ' ■'■■ ■■':,.' '■ ..'..- a 1 NEW ZEALAND MORTGAGES. During the year our loan operations were characterised :by an . unusually large expansion in mortgage. investments, a sum of approximately one million pounds being advanced, mostly on rural lands conservatively valued and providing unimpeachable security. Remarking on Dominion affairs generally, it r will be .of interest to note' that about 94 per- tent, of New' Zealand's exports . are farm products— chiefly crossbred wool, dairy produce, and meat— and"it is' sate to say that •the underlying factor in our trade recovery has been theVmattaial improvement in prices received: for our farm products-during the year? under review. Taking 1914 as a base and calling it 100, our farm produce export index for 1936 averaged'l23,, compared witn 98 in 1935,,99 m 1934,, and an average of 82 for the three yrears 1931-33. For the current year, 1937, wool prices have been even higher than during the same period in.' 193(6, and our other export lines from/par ,to rather better. The outlook for 'our etxport prices for 1937 is therefore bettejrthan 1936, added to which our volume of exports has, in recent years, been steadily increasing.1 . ; , ■ TAXATION OF LIFE OFFICES. Before concluding my remarks there are two matters to/ which I should specially like to refer, namely, taxation and population! As regards the former, it is a ma/tter for some particular regret that' the Government thought fit during fthe year to increase the taxation payable by life offices in New Zealand. Aft first-glance it may perhaps be considered that life assurance offices, by yirtue of their large and rapidly-accumulating funds, can well afford the /demands made upon them for taxation. The all-important fact must not be/ overlooked, however, •that these largo funds are not "reserves," as in /.he sense of ordinary trading concern^;, built up from profits, but rather do they comprise the aggre-' gate of many interests of individual policy-holders—the totals of the minimum amoiimts which will, with future premiums and interest, be sufficient to pay fiiture claims when they arise. In other words, these funds are capital siims, or savings, which must eventually be returned to the policy-holders or their dependants. There are sojne 600,000 life assurance policies at present in force in- New Zealand, anc'l a large proportion of these policies: represent a provision for dependent Wives and children, and as every additional expense incurred by the office must necessarily restrict its bonus-paying powers, the tax oh insurance offices has not unjustly been referred to as "a tax on widows and orphans." , "The bonuses paid to policyholders cejrtainly often receive _ the designation! of "profits," but strictly sbeaking -this is an incorrect use of the word, as 'they are, in reality, excess contributions which are returned either in the form. of cash or increased assurance. The payment of a life assurance bonus is.; analagous to the case of a buyer receiving 5s change out of a pound nolte which he has tendered for goods costing 15s. If a life assurance office knfcw in advance what rate of mortality it was going to experience, what ratie of interest it would secure on its iuwestments, and what expenses would tH! incurred in the future, there would bq: smaller premiums chargeable and no surplus for any bonus payments. It may : well be contended, therefore, that farjifrom being subject to increases |in tax.vution, life offices should be accorded^ every possible relief• Under

the 600,000 policies I referred to earlier1, there are in New Zealand assurances totalling nearly £120,000,000, which represent an average policy of less than £200, and an ; average annual premium payment of about £7. This demonstrates very forcibly the fallacy 'of the assumption that life offices are a combination of capitalists. NEED FOR GREATER POPULATION. ■ Turning to the wider subject of population, one might be forgiven for voting an old Greek philosopher who, peaking of the Athenians of .'his day, 'rote: "We regard a man' who takes o interest in public affairs not as a armless but as a useless character: a ood citizen does not neglect his own ousehold because he takes care of the tate." Although New Zealand has erhaps the lowest infant mortality in le world, the serious fact remains lat the accelerative rate of population lcrease is slowly declining. It seems lat the progressive fall in the birthite was aggravated by the depression, ut. the advent of more prosperous mes> notwithstanding the marked inrease in. the number of marriages, has jiled to check the fall in the birthate.

I trust I have not exceeded my time, and in closing I would, just like to pay a tribute to the untiring and loyal services rendered by the staff and outdoor Representatives of the New Zealand branch during the year that has passed. I have much pleasure in supporting :the motion for' the adoption of the report.—Published by arrangement.