NATIONAL MUTUAL LIFE ACCOUNTS

Evening Post, Volume CXXXVII, Issue 87, 13 April 1944, Page 7

NATIONAL MUTUAL LIFE ACCOUNTS

BEST FOR MANY YEARS

ANNUAL MEETING.

i-. The 74th annual meeting of the - National Mutual Life Association was ■ held in Melbourne on March 14. Sir ; Harold Luxton, chairman, said: — "The reports and accounts which are i in . your hands are very satisfactory. Indeed, having regard to the manifold : difficulties with which we were beset during the year, they are in my opinion the best accounts that have been presented to us for many years. ■ Increased New Business. "Our new business of £10,439,533 (which includes £1,851,230 of new group life insurance) shows a substantial recovery from the previous year's total of £7,683,902. The increased number of staff superannuation schemes and group life insurance effected with the Association accounts for much of the increase. Total Income Record. "The Association's total net income for the year was £6,552,288, a record figure. The gross interest income represent, a rate of £4 8s 6d per cent, and after deduction of rates and taxes the net rate was £3 18s 5d per cent. "On the expenditure side of the revenue account the main features are a moderate increase in the amount of war claims, a substantial reduction in the amounts paid for surrenders, and a further reduction in the irate of expense. The war claims amounted to £295,000, as compared with £240,000 for 1942. Altogether payments to policyholders amounted to £3,619,596. Expense Rate Remarkably Low. "If for the purposes of a true comparison we exclude A.R.P. expenses and war damage insurance, the ratios of total expenses to total net income for each of the last four years are as follows:—1940, 8.93 per cent.; 1941, 8.59 per cent; 1942, 8.31 per cent; 1943, 8.15 per cent. In these days of increasing costs this is a remarkable achievement. Having regard to the widely spread nature and extent of our business and of the services we render, I consider that our record in this respect is noteworthy. In considering this question of costs it is important :o bear in mind that the association's rairs of premium are lower in most instances than those of other offices. Assurance Fund. "The result of the year's transactions is that the sum of £2,104,559 was added to the assurance fund, which now amounts to £53,778,881. Government securities increased by £3,615,887, and £3,345,000 of this sum was subscribed directly to war loans. Triennial Investigation. "The total business In force at the date of the valuation consisted of 321,419 policies, having a total sum assured and bonus additions of £140,----897,720. and providing annuities of £240,951 per annum. The actuarial liability under these policy contracts was ascertained on the same basis as to mortality and interest as was used in 1940. To this figure there was added a sum of £300,000 as a special reserve against future excess war mortality (the net loss experienced under war claims during the triennium was £523,000). The net liability so calculated came to £50,510,975, and as the amount of assurance fund was £53,----778,880, the net surplus for the triennium on this basis amounted to £3,----267,905. Our Actuary, however, has recommended that in pursuance of the Association's policy of maintaining a desirable margin in the association's future interest rate, the actuarial reserve should be increased by a sum of £1,300,000, this being the additional amount required to permit of all the Association's assurance liabilities being valued on a 2_> per cent, interest basis under the A. 1924-1929 table. Allocation Of Surplus "After making this provision there remained a divisible surplus of £1,967,----905, which your Directors have applied as f0110w5:—£1,499,221 to provide bonus additions of £2,275,000 to members' policies; £318,684 to increase to £2,200,000 to the 'investment fluctuation reserve'; £150,000 as a grant for staff superannuation purposes. "The bonuses allotted are on a scale that all members, I feel sure, will agree are satisfactory, in view of the surrounding circumstances, and in this respect the course we have followed is in keeping with that of other life assurance offices. "These, then, are the results of the triennial investigation, for which we decided two years ago to wait. We have gained by that decision. It has enabled us in determining our course of action to take into account all the changes, financial and otherwise, that occurred during that very critical period, as well as our actual results. We are quite satisfied that in applying part of the surplus to bring our reserves into line with present financial conditions and in preparation for the post-war period we have acted correctly and in the best interest of the members. You will, lam sure, agree that our Association, whose chief function is to provide security, should itself be secure. I trust that the result of the* investigation and the allocations we have made meet with your satisfaction. The war is not yet over. when it will end no one can say, but this much is certain; we enter the new triennium' in a strong position financially to meet whatever may lie ahead. Increased Interim Bonuses. "In the absence of some unusually adverse experience, and in view of the large additions which have been made to the reserves, it is anticipated that for the year now current the Association will be in a position to allot bonuses at rates substantially in excess of the rates allotted in respect of each year of the triennium just ended. Tribute To Staff. "I know that you wish me to convey to our staffs, both indoor and in the field, an expression of our appreciation and thanks for their loyal and efficient service. We also remember with gratitude and thankfulness those members of the staff who are still absent on active service." —P.B.A.