NATIONAL INSURANCE COMPANY

Evening Star, Issue 19409, 18 November 1926, Page 10

NATIONAL INSURANCE COMPANY

SATISFACTORY YEAR’S WORKING RESERVES TO BE MAINTAINED , Tbo annual general meeting ofsharej holders of tho National Insurance j Company of Now Zealand, Ltd., was ’ held this afternoon in the company’s office in Rattray street, Mr John Mo- . loney (chairman of directors) presidi ing. In moving the adoption of the annual report and balance-sheet, Mr , Moloney said: “ Since the date of our i last annual meeting, Mr, J. Mallard has retired from the management of ■ the company, and the position of gouei ra! manager has been filled by the ap- . pointment of Mr' Alfred Mumlord, manager of tho Melbourne branch of the company’s business. “During the ffst year tho assets i figures in the balance-sheet (£c-.)1.2e5), ■ while varying in detail, show an increase of £16,087 over the previous year’s figures. Loans on mortgage (£111,386) have been reduced by £16,375; debentures (£123,617) Imre increased by £2,631; war loans (£313,531) are less by £11,670; and cash on , deposit and short call (£61,000), ■ against £70,000 in 1025. “The purchase of office premises in Adelaide and Wellington--during fhc ■ year has brought the sum against Ireo- ■ hold properties in tbo domin'on and Commonwealth up to £76,180. “In Adelaide we have occupied ns tenants for many years a leasehold office in Waymouth street, and recently who,n if became necessary to look for : fresh offices, we were foicunat? in being able to purchase a Ireehold prooorty only two noois fiom the bidding occupied by ouiselves _ At present various alterations arc being made to this to fit it for our occupation, which it is hoped wall not be delayed more than a few months. “Tho Wellingtin buiili.ig N 0... 22 Custom-house quay, is of lour.fi,-orys, and a-portion of the ground Horn provides ample accommodation for our staff, both now, and for many years to come.','.Tho remainder of tho -minding is in tho occupation of a number of tenants:, and altogether your directors are satisfied that tho investment is a sound one. , ' ■ , ■ “Wo purchsed a freehold property_in Brisbane some four years ago, occupied at that time by various tenants. Tho leases of these ‘tenants having now expired, this building is also being modernised for occupation by tho Queensland manager and staff. “Liabilities, exclusive of capital and reserve funds (£711,937) amount to £37,457, an increase of £573 for the venr. “Income from underwriting (£2lq--341) is greater for the year by £5,225, and an increase of £1,300 in interest and rents brings tho return on investments up to £32,192 after deducting income tax (£3,493) on tho gross amount of £35.960. (i Losses (£109,725) are higher than those of any former year (the total loss by fire in the dominion alone for the year 1925 is estimated at over £1,000,000), and general expenses C 83.2-14, while subject to the most careful .scrutiny, keep on the up grade in company ■with the ever-soaring demands of the world’s workers in return for their services. After paying an interim dividend of £12.500, and adding £15,000 to the’reserve fund, tho balance of profit and loss account stands at £51,901 8s lid, out of which a payment of 2s per share is recommended. This will absorb £20,000. and the balance (£31,901 8s lid) is carried forward, “At tho last annual meeting of the company reference was made to a circular letter which had been received from some of tho shareholders, advocating tho distribution of a portion of tho reserves by tho allotment of a number of unissued shares of the company, the amount paid up thereon to be mot by a transfer from the reserve fund. “ In these days of fierce competition it behoves cverv shareholder in an insurance company to further tho interests of that company by insuring with it and by encouraging others to do so. Not only do many’sharcholders neglect this duty, but they also at times exhibit an impatient desire to instruct directors in tho management of the company’s finances. “ Of tho thirty-eight signatories to that circular letter or requisition eleven wore entered on the share register in 1923, three in 1924, and fifteen in 1925. making twenty-nine of tho thirtyeight who asked for a distribution of oart of the reserves, and not one of that number contributed to the revenue of tho company, and it is these now shareholders who arc clamoring for more.' It is but just to say that premiums amounting to £29 for the year were received from six of tho other nine. “ During the past year your directors have given the' proposal careful consideration, and retain the opinion expressed last year, that any alteration in the existing state of tho capital and reserve funds would boa mistake, for to comply with tho request would bo a departure from tho principles observed by this and the majority of sound and wellmanaged insurance companies the world over. “ It is in the interests, not only ot shareholders, but of our policy holders also, that tho reserves of the company should ho maintained, and, moreover, increased at every opportunity, as a guarantee to the insuring public that whatever conflagation or catastrophe may occur, the National Insurance Company will be in a position to meet its obligations. It is many years since anything in the nature of a catastrophe has been experienced either in New Zealand or Australia, and this, it is to be hoped, may never occur, but the possibility is always before us. “ Your directors are of the opinion that any transfer of reserves to capital should be in the direction of a reduction of the shareholders’ liability, and it was in accordance with this principle that transfers were made from the reserve fund of 10s per share on each occasion in 1916, and again in 1923. and if in tho future the funds of the company warrant it, further reductions of tho "liability of shareholders will bo made from the reserve fund. •“One of the features of the past year has been the establishment by some of the Australian State Governments of insurance departments, with the object of entering into competition with the legitimate insurance companies. The Western Australian and New South Wales Governments have both instituted insurance departments to undertake tho writing of workers’ compensation and other business. In tho former State a monopoly of workers’ compensation business was threatened, but, according to recent advices, wiser counsels have prevailed, and the activities of the Government will be limited to active competition with companies already licensed by the State. “In New South Wales a Workers Compensation Act was recently passed, containing provisions entirely foreign to those usually associated with legislation of this nature, and placing on industry and employers of labor an additional burden, the effect of which is viewed with apprehension by tbo business and pastoral interests of New South Wales. Owing, to the general uncertainty with rgard to the_ effect of the new Act, a number of insurance companies withdrew from -the employers’ indemnity business altogether; but after mature consideration your directors decided, in the _ interests of our policy holders, to continue the protection afforded by the company in the past. Shareholders may, however, bo assured that it is being carried out on conservative lines, and that this policy will be maintained until such time as experience enables pa to form $ Bwrj

accurate estimate as to the outcome of the business. | “In the dominion, also, an amendment to the Workers’ Compensation j Act has again increased the of ■ tho employer, and here, again, acting on the principle already mentioned, of affording every protection to the in- ; terests of our assured, we shall endea- t vor to carry the additional liability. j “ I bog to move tho adoption of report and balance-sheet.”