NATIONAL MUTUAL LIFE ASSOCIATION

Evening Star, Issue 19760, 10 January 1928, Page 3

NATIONAL MUTUAL LIFE ASSOCIATION

INCREASED BONUS. The fifty-eighth annual meeting of members of the National Mutual Life Association of Australasia, Ltd., was held at the head office on 21st December. The chairman of directors (Mr George Swinburne) presided. In his opening remarks the Chairman referred to the loss sustained by the association through the deaths of Messrs Andrew Newell and Edward Trenchard, directors, and Mr Arthur Langford, manager of the Adelaide branch. Mr Newell, he said, has been a director of the association for fortyseven years, and chairman for seventeen. Mr Trenchard had occupied a seat on the board for thirty-five years, and had succeeded Mr Newell as chairman in 1926. Mr Langford had been in charge of the association’s affairs in South Australia for forty-three years, and he was highly respected there. PROSPEROUS YEAR. Moving the adoption of the directors’ report and balance-sheet, the Chairman said;— The report, which is in your possession, shows that the association has had a prosperous year. The new business transacted amounted to £8,234,713, which is £470,000 more than the previous year’s figures. The whole of this new business, you will understand, is what it called ordinary as distinguished from industrial business. Industrial business may bo defined as assurances for sums not exceeding £25, the preminums on which are received through collectors. The cost of collection is necessarily high, and falls on the policy-holder. After very mature consideration, the directors are determined that, unless they can discover some more economical way of conducting it, wo will not undertake industrial business. LARGER INCOME. The premium income is £199,802 higher, and again includes a large amount of £353,212 of single premiums. This kind of contract continues lo he uu attractive form of investment to some people. The net interest is £105,413 higher, although the amount paid for rates and taxes during the year, and charged in our accounts against interest, increased by £9,827. 'The amount shown in the revenue account, £1,420,575, is equal to 5,54 per cent, of the moan amount of the assurance fund. Tin’s rate is .035 less than the rate of the previous year. This difference is due to the fact that wo had some largo amounts invested in our own new freehold properties, which were only partly productive during the year. Our Brisbane building is still in the contractor’s hands,’but it is far enough advanced to enable ns to occupy the portion which is reserved for the accommodation of the branch. The total income for the year is £4,378,798, and shows an increase of £298,171. Death claims of £675,212 arc £6,105 higher, but wc had some four and a half millions more at risk Ilian we had in the previous year. The rate of mortality amongst our members was very light—it was only 68 per cent, of the expectation. The average duration of the policies under which claims were made was nineteen years. Of the amount paid no less than £143,080 represents bonus additions to the original sums assured. The amount paid to members whoso policies matured—£793,l2l—includes £178,312 of bonus additions. EUNDS STRENGTHENED. Tiie new business expenses and the ordinary expenses of management are about tho same percentage of the ordinary premium income, by which 1 mean the income from any single premium has been omitted, as in the previous year. The percentage is 14.6 per cent. The assurance fund has been increased during the year by £2,123,697, which is £148,492 more than the amount of the increase in the previous year. The principal changes in the items in the balance-sheet, which are the result of the year’s transactions, are an increase of about £1,041,900 in the loans on mortgage, and an increase of about £688,000 in the amount lent to our members on tho security of their policies, in some cases with collateral security. _ There is an increase of £141,000 in the properties acquired by foreclosure which is due to its having been considered advisable to define the legal position of properties which have been in our hands for some years. House property, which means our office premises at head office and the branches, has increased by almost the same amount of £141,000. This is due to our purchases in London and Bloemfontein, which have been reported, and to the progress of our building operations in Brisbane. From the nature of our business it is not possible to show the result of tho year’s transactions by a brief summary of the revenue account and bal-ance-sheet. Every policy issued is a contract to pay a certain amount on the happening of a specified event. The premiums which we receive as consideration for these cun tracts are based on three assumptions; Firstly, that the funds of the association will be invested continuously so ns to yield a return of 3J per cent, per annum; secondly, that the rate of mortality amongst the persons assured will be as shown in the tables based on the experience of assured lives; and, thirdly, that the business will bo managed economically. 1 have referred to these three points in my comments on the revenue account.

Funds, instead of yielding 3i per cent, have yielded 5J per cent. The rate of mortality on the assured lives is only 58 per cent, of the expectation, and our total expenses amounted to only 14.6 per cent, of the premium income. We have, then, strong proof that the year’s results are satisfactory, hut this cannot he definitely determined until the present value of the association’s liabilities under the contracts which were in force at the end of the year has been ascertained. INCREASED SURPLUS.

f am glad to be able to inform you that the valuation which has already been completed discloses the fact that we have an increased surplus in the assurance fund, which will enable us to declare still larger bonuses to our policy-holders than we declared last year.

You have been reminded more than once from this chair that the only people who gain any advantage from the success of the association’s business are the policy-holders. Every penny that we receive over and above the amount required to meet our liabilities belong to them. But the association benefits not only its policy-holders, but the whole community. By accumulating the comparatively email contributions of the individual it makes them fruitful and

available for the development of the country. Our business is drawn from all classes. The amounts assured under policies issued during the year range from £SO to £50,000, the average amount assured having been £4BB. Our funds at the end of the year were widely distributed. Of the total of £26,000,000, over 40 per cent, is _ invested in Government and municipal securities. Of the amount lent on mortgages 40 per cent. w r as on the security of broad acres, 38 per cent, on city properties, and 22 per cent, on suburban properties. £4,424,418 of tho association’s funds lias been lent to policy-holders on tho security of their policies. SOUND MANAGEMENT. It is with no feelings of convention that the directors, on behalf of the policy-holders, thank the staff for their consistently good work given to the association. The results show the fine work achieved. The motion for the adoption of the report and accounts was seconded by Sir John MacFarland, and carried unanimously. Mi’ George Swinburne was re-elected a director, and Messrs H. C. Tudehope and W. M. Jarvic were reappointed auditors. New Zealand directors: O. S. Watkins, Esq., J.P.; J. M. A. llott, Esq., J.P.; W. D. Stewart, Esq. General manager for NeH Zealand, F. W. Nicholson, J.P. District office, Liverpool street; W. Anderson, district manager; district supervisor, L. L. Kirkcaldy.— (Published by arrangement.)