THE MUTUAL LIFE AND CITIZENS' ASSURANCE COMPANY, LTD.

Evening Post, Volume CXXV, Issue 92, 20 April 1938, Page 12

THE MUTUAL LIFE AND CITIZENS' ASSURANCE COMPANY, LTD.

UNEXCELLED FINANCIAL STRENGTH. The fifty-first Annual Meeting of the Company was held in Sydney on the 7th inst. The Chairman (Mr. James Ashton), in moving the adoption of the, report and balance-sheet, said: "I must preface my. remarks this morning with an expression of profound sorrow at the loss through death in January last of Mr. W. J. Bloomfield, the Joint Managing Director, whose connection with the company extended over 46 years. Mr. Bloomfield, as you all know, was a man of outstanding ability and sagacity, and the grief occasioned in the ranks of the company by his death was shared by a very large number of people in the business world of Australia who were connected with him by ties of friendship.

"The year just ended has witnessed another forward stride by the company in all its operations. New business, which has gone ahead so well in recent years, has this time again exceeded the highest figures for any year in our history. I have in the past quoted comparative figures for several years showing the striking advances made from year to year, especially the increase which was obtained in our jubilee year. I need not repeat again the earlier figures,.but this first year of our second half-century compares with the jubilee year thus:— NEW BUSINESS. 1936. 1937.' , £ . £ Ordinary branch 7,047,491 8,158,354 Industrial branch 3,798,079 4,401,774 £10,845,570 £12,560,128 "We have every reason to be gratified with these results, and in view of the established recognition of the company's financial strength and of the attractive character of its policy contracts, we have reason, all going well with the world, to anticipate that future years will be equally, if not more, fruitful.

"In our .jubilee year our total income showed a large increase, but our income for 1937 surpassed the figures for that year, and was almost £4,000,000. This large sum as it came in was put to use in the various services of the company. Payments to policy holders or their beneficiaries accounted for £1,712,716 during the year and a further £1,441,415 was added to the funds.

"It is hardly necessary for me to again emphasise the wide field of usefulness the company covers. Many people do not realise the extent of the part that life assurance plays in the life of the community. The prompt payment of claims under policies means that-money reaches many homes at a time when it is sorely needed, or greatly welcomed. ' It is hard to value in pounds, shillings, and-pence the beneficent effect of-such payments.

"It is noteworthy'that life assurance companies are sometimes criticised for accumulating their funds, while savings banks are not. It is not always realised that it is just as necessary for them to accumulate funds to provide for their liabilities as it is for a savings bank to ensure that its funds are large enough to provide for its deposits.and other liabilities.

"Interest outstanding, which is not brought into account, was only £4001 at the close of the year, a reduction of £2000 as compared with the preceding year. The smallness of the item bears witness to the soundness of our loan investments.

"Interest revenue continues to show an excellent effective rate of £4 14s 5d after deduction of taxation.

"We value our policy liabilities on the strongest actuarial bases in use in Australia by setting up the amount of actuarial reserves that would be required if we earned interest at the rate of only 2J per cent, in the industrial branch and 2J per cent, in the ordinary branch. As our effective net rates are £4 13s 7d and £4 14s 8d respectively, the exceptional strength of our position may be realised. Not only does this make our position exceedingly strong, but, with other sources of profits unimpaired, it ensures the .continuance of high rates of bonus to policy-holders. The same handsome rates declared for the last year are repeated this year.

"Notwithstanding the large increase in business in'force, death claims were only slightly in excess of those for 1936, whilst surrenders and cash values of bonuses, reflecting improved economic conditions, were actually lower.

"Loans on policies, which with our expanding business might be expected to increase, continue to decrease, another healthy sign. Expense rates testify without comment to the maintenance of economical management.

"The erection of office buildings in our two principal cities is progressing satisfactorily. The Sydney office should be ready for occupation, by Sep-tember-October, whilst the contract for the Melbourne office provides for completion about the same time. These works have been undertaken for a two-fold purpose, firstly, to provide space for the carrying on of our large and rapidly expanding business, and .secondly to secure a suitable investment for some of our increasing funds. The sites of both buildings have few equals in Australia, and the plans provide for letting accommodation of the most modern character, including, in the Sydney building, a well-designed system of air-conditioning.

"It is of interest to note that the total payment to policy-holders since the inception of the company amounts to £35,105,354. Adding to this sum the assurance funds in hand (excluding reserves), the amount is £59,212,497, which exceeds by nearly £6,000,000 the total premiums we have collected from policy-holders from the company's beginning. The existing contractual engagements of the company are represented by 617,000 policies, assuring (with bonuses) £75,919,397.

"A wide distribution of the benefits of life insurance can only be achieved by the employment of capable representatives, whose duty—and interestit is to show people the manifold ways in which life insurance can be made to serve individuals and their dependants. These representatives are carefully chosen by the company for their character and capacity. Their work merits mention, since by it habits of thrift and foresight are developed amongst persons who have many inducements to spend money more freely than wisely. In industrial assurance, experience the world over has shown that in order to ensure the continuance of policies it is necessary to collect premiums in small amounts at frequent intervals. Policies are delivered and premiums are collected at the homes, and, in addition, when a claim matures the necessary forms are completed and the amount of the policy delivered to the insurer. The immense amount of detailed work in this department would make the cost prohibitive but for the effective systematisation developed over ■ many years of effort.

"The growth of industrial assurance business in Australasia has been phenomenal. Over its short history, covering a little more than half a century, the insurance carried by those who have availed themselves of the system has been built up to a sum assured amounting to more than £100,000,000. The premiums collected are. well over £100,000 per week, and the collection entails over a million house-to-house • calls per week. These figures demonstrate convincingly the

important part industrial insurance plays in the nation's economy. To provide against the possibility of misunderstanding, our policies are set out in the clearest and simplest language, and policy-holders arc informed that il on consideration they are not satisfied with the conditions of the policy delivered to them they may secure a refund of the amount paid by them if they apply within four weeks." ■ Mr. F. Leverrier, K.C., in seconding the chairman's motion for the adoption of the report, said: "Mention was made by me at the last annual meeting of the formation of a group department handled by a j separate section of the field staff. The. progress of this department last year j was most marked, showing that it fills another need of the community. | Groups are organised amongst the | staffs -of employers of labour, who arrange to deduct the weekly instalments of premium from the wages of the employees. As this service is rendered in most instances without any charge on the premiums collected, and thereby dispenses with the cost of a collector, it enables the company to give larger benefits than is possible in the industrial branch. It might aptly be termed an intermediary branch between the industrial and ordinary de-. partments, and the success of this newarm of the service is not only a testimony to the value of the work performed, but indicates clearly the desire of the wage-earners to make provision, in the form of an annuity or lump-sum payment, for their inevitable retirement as age advances,' and at the same time affords protection to their families in the event of earlier decease.

"The staff work is highly appreciated and the results give promise of a rapidly increasing department." A vote of thanks to the directors, trustees, and staff was proposed by Jiflr. B. Latham and carried with acclamation! .

A vote of thanks to the chairman, proposed by Dr. A. E. Mills, terminated the proceedings.—P.B.A.