STATE FIRE.

Evening Star, Issue 14632, 31 July 1911, Page 2

STATE FIRE.

?~:-m<r A SUCCESSFUL YEAR. • rir-The manager of the State Fire Depart „ "."3WM|t» in his annual report presented t< last week, says: ; -: The past year (ended December 31 '1910) has proved to be by far the mos ancoissful yet experienced by the office -The net premium income amounted t< - £40,551 los 2d. as against £35,281 14; ""■ 7d, for the previous ye.-.r, showing tin very substantial increase of £7,270 0s 7d yepreserting the largest expansion in busi ness in any one year since 19C6. The profits, after appropriating I■> resrrvi '£2,908 Os 3d for unearned jiremiums amounted to £3,437 13s. The year com ■enced- with a debit balance of £1.44] fe 6d. which has been converted into ,1 iredit balance of £7.0-16 os 6.1. The great Wt profit made in rnv previous ve;ir was £2,688 15s 7d, realised in 1909. 'The not losses amounted to £18.913 18s 4.1. as -against £18,534 12s for the previous year, .. 'the ratio ot losses to premium income bemg 46.64- for 1910 and 55.63 for 1909. The losses for 1910 may be regarded as being below the average" to be expected. The office vas fortunate in hol being involved in any large block conflagrations, and losses in bush tires were not i>!' a serious nature. The ratio of working expensis was 25.3 per cant., as against 30.5 per cent, for 1909 and 58 per cent, fur 1903. The reduction of 2.2 per cen:. represents a saving of nearly £9OO on the busiu—s of 1910 W compared with 1909. It think it may now be safely said thru the working expenses of the State Tire Office are lower than those of any similar business carried. on in this Dominion Included in these expenses is an amount of £729 18s Id. representing contributions i> tire boards. These contributions in some districts are a t * very heavy charge on the premium income, absorbing, as they do. from 2.73 to 20.02 .per cent., and averaging about 7J, per cent, of the total premium income from all the fire board district.-. It will be noted from the balance-sheet that tha investments of the otiice are now £20.000. as compared with £IO.OOO for 1909, and the reserve for unearned premiums £16,220 14s Id, as against £13.312 13s lOd for the previous year. The exceptionally good results of the past year's operations cannot bo looked upon ;i3 furnishing evidence that the existing rates are such as to ensure a reasonable margur of profit over a series of years. Less favorable years are fairly certain to occur. The rates on some of the more hazardous classes of risks are. in the general manager's opinion, inadequate. The sum of £2,000 was raised when this office commenced operations in 1905. and upon this sum interest has been paid annually. The office has, therefore, sinco its inception been entirely self-supporting. Mr Robieeon.. in concluding his report, says : But to place it reasonably beyond the possibility of, in future, having to call upon the Government for additional . funds, it is essential, in my opinion. that a fairly substantial reserve fund - should be built up to provide against large losses, which are within the bounds of possibility in cases of serious conflagrations such as occurred in the cities pi Christchurch and Wellington during the past few years. To facilitate the -" building-up of such a reserve fund 1 recommend an amendment of clause 42 of the- State Fire Insurance Act providing for distribution of profits. In view of the very heavy reduction of ratesranging up to 53.$ per cent, on the greater portion of the tire premiums for ' the Dominion—which eventuated when the State Office was established, and , which has been the means of saving to the people in fire premiums exceedingly * hirge sums annually, the present position of the office cannot, I think, be regarded ms other than satisfactory.