STATE INSURANCE.

Evening Star, Issue 13016, 29 July 1908, Page 10

STATE INSURANCE.

■» FIRE EISKS. THE PREMIUMS ARE TOO LOW. [From Our Parliamentary Reporter.] WELLINGTON, July 28. The annual report o£ the State Fire Insurance Office for the year 1907 was presented to Parliament to-day. " The year 1907 is the thisd financial year of the State Fire Insurance Office," states the manager. " The net income for the three years since the inauguration of the department is as follows :—1905, £13,127 lis 9d; 1906, £20,962 8s; 1907, £23.194 13s. It is therefore pleasant to be able to show that the insuring public have given the State Fire Insurance Office an increasing support each year. The rates of premiums during the whole of 1907 were the same as those which prevailed at the end of 1906.

" The rates of premiums for .fire insurance in New Zealand are too low is shown by, the fact that the results attained by the State Fire Insnrance Office on itts operations during the past three years show a profit result of only £1,566 17s 5d after writing off £1,902 15s and reserving £7,731 lis for unearned premiums. The insuring public, however, have reaped the benefit of the reduced rates, seeing that the same approximately amount to £450,000 for the past three years. The revenue account and balancesheet attached show that after writing off £634 ss, being the third quarter of the preliminary expenses, and reserving an additional £744 Is 8d for unearned premiums, th» profit and loss account shows a credit balance of £867 7s "d. which I consider a very satisfactory result, seeing that same has been attained free of cost fo the public in the face of strong and active competitive opposition, and at rates which have during the whole period been the lowest in the world for similar risks. " In further support of my views respecting the inadequacy of the present rates of premium I beg to point out that the State Fire Insurance Office now has bo pay its pro rata share of the insurance companies' contributions towards the pnrchase and maintennce of fire brigades wherever same are established and operating under the Fire Brigades Act, 1907, and this additional charge will range from 5 per cent, to .7£- per cent, of the premiums received at each centre where a fire brigade working under the Act is in operation. —The Accident Branch.— " The accident insurance branch of the Government Insurance Department did satisfactory business in the year 1907. The premium income amounted to £21,477, as against £20,815 in 1906, being an increase of £662, and the income from interest to being an increase of £244 on that of the previous year. The claims, including provision for thos9 in course of settlement at the end of the year, amounted to £11,283, a decrease of £2,432. The ratio of claims to premiums earned was 53 per cent., as against 66 per cent, in the previous year. The expenses, including taxes and commission, were £6,647, and the ratio to premiums was 30.9 per cent., as against 31.7 per cent, in 1906. The accident funds now stand at £6,505, and in addition the branch has a reserve fund of £12,187. The investments are on a satisfactory footing, and there is no interest overdue. —Government Life Insurance—Rapid Growth.— The Lisurance Commissioner reports, in dealing with Government life insurance for the year 1907, that 3,293 policies were completed, assuring £752X65, being' £22,960 in advance of the new business for the previous year. Thirty-four annuities were also granted, on which the purchase money amounted to £17,179. The total business now in force is 46,595 policies, assuring £10,855,153 (and £1,124,970 bonuses), at death or maturity, together with 350 immediate and deferred annuities for £59,617 per annum, the total business bearing an annual premium income of £331,430.

The total income of the year was £526,713, made up as follows:—New premiums (including single premiums), £22,111; renewal premiums, £303,792; purchase money for anmioLies, £17,179: interest, £183,618; fees. £l3.

During the year 388 policies became void death for claims amounting to £135,671, which is considerably under what is provided for in tie tables of mortality used by the department. Three hundred and sixty-seven policies matured as claims during lifetime for £105,461, a larger amount than has ever been paid to the holders of matured policies in any one year. This is entirely satisfactory, being a practical testimony to the permanent nature of a form of assurance which makes provision for old age as well as early death, and probably meets the requirements of the people more effectually than any other. The large amoant paid for these matured policies causes no strain on the department's resources, as the amount, being exactly known beforehand, is adequately provided for in advance. The surrenders and loans released by surrender have decreased from £52,926 in the previous year to £46,450 in 1907.

A satisfactory feature, of the year has been the reduction of the expenses of management from £39,884 to £38,352, concurrently with an all-round increase in operations, resulting in a material reduction of the expense ratios, and a consequent saving to policy-holders. The total amount paid by the department since its

foundation, tbirty-eigbb years ago in respect of dearth claims and matured endowments has been £3,427,327. Of this SSSb^dS."" paid fa 1907 '■"**

The net increase in the funds durin" the year amounted to £155,813, and the total assurance annmty and endowment funds, apart from special reserves, have passed ™,/£ T £ 1 f nmLOa > and now stand at £4,147,411.