NEW ZEALAND INSURANCE COMPANY.

Lyttelton Times, Volume CXX, Issue 14916, 11 February 1909, Page 9

NEW ZEALAND INSURANCE COMPANY.

[Pick Press Association.] AUCKLAND, Fobruary 10. Tho general meeting of shareholders of the New Zealand Insurance Company was held this afternoon. • Tho chairman, tho Hon S. Thorne George, presided. The chairman, in sio course of his remarks, said: “Tho amount of business lor tho year lias been about normal, tlio premium income amounting to £620,524, which shows a slight increase on the previous year. Our interest and rents amount to £26,875, giving a return of 3.88 per cent, which is n shade lower than last year, and is in a, measure duo to the expenditure on our now offices at Wellington not yielding any return for tho year. It should also be borne in mind that our San Francisco property has only earned a very moderate return since tho great conflagration. Wo are now taking steps to alter this, erecting a new. building thereon. I should hero like to draw shareholders’ attention to the fact that our investments amount to the sum of £710,512., which has been only once exceeded in the history of the company, in 1905, the year before the San Francisco calamity, when there wero £829,202, less the purchase money due to the New Zealand Accident Insurance Company, amounting to £115,000, leaving not £714,202, so. that we have again reached tho strong financial position wo held at that date. I would also point out that in 1905 our paid-up capital, reserves and undivided profits were £723,680, whilst _at the present date they amount. to £758,884, being the record in tho history of the company. And now, turning to the debit side of tho account, our expenses are £159,323, being a somewhat heavy increase cn tho previous year. To a certain extent this is more apparent than real, as it is partly accounted for by a chango in our system, and we are debiting certain accident charges to expenses which wero formerly debited to premiums, and there are also the contributions to the . various brigades in the dominion, which is entirely a new item coming to account. The ratio is 25.63 percent, which, however, is below our average of previous years. Our losses during the year amount to £409,357, which sum includes all known and unadjusted losses. The loss ratio to premium income is 65.98 per cent, as against 65.97 per cent of the previous year, and our surplus on underwriting amount to £51,744, or 8.34 per cent on our net premium income. After allowing for the interim dividend, amounting to £15,000. paid in August last, the available balance which you have now to deal with amounts to £70,293, from which your directors recommend the following appropriations: —£30,000 to the reserve fund, which will then amount to £185,000, and £15,000 to the reinsurance fund, which will then stand at £250,000, the two funds together amounting to the sum of £435,000. Your directors aro still carrying out what we know to bo your wish, viz., tho building up of substantial reserves. We also recommend tho transfer of £ISOO to the investment .fluctuation account, this being required for the purpose of meeting the fall in tbe prices of bonds and of debentures that are maturing now standing above par. The balance of £23,793 is available, out of which your directors recommend tho payment of a dividend of 2s per share, amounting to £15,000, being equal (with tho interim dividend) to 10 per cent for the year. And now as to our underwriting in the dominion. Our year’s operations have resulted in a loss which, I believe, has been the experience of all other fire companies doing business in Now Zealand. This lias been caused by the exceedingly low rates, which have been ruling, together with the heavy expenses which aro entailed upon, companies through the contributions under tho Fire Brigade Act. Tho condition of fire underwriting "in tho dominion gives cause for grave consideration. It- stands to reason that in view of the heavy risks wo carry,, and the conflagration hazard which is always with us, the rates ought to he put on a basis which will allow of a proper provision being made for such a contingency, and also for a fair profit after paying current losses. Although it does not affect our last year’s figures, I may liore refer to what has recently transpired as regards our accident business. Shareholders are aware that, owing to the coming into operation of the Workers Compensation Act of last session, our mining industry has been passing through a very critical period. The liability of mine-owners has. been greatly' augmented by the inclusion of certain specified diseases in Clause 10 of tho Act, in addition to an increase of the amount payable for the death of a workman. This liability was so groat and indefinite, and the time within which workers could make tbeir claims so unlimited, that insurance companies refused to cover the risk without medical examination. This as you are awaro, the men (unwisely T

think) refused to submit to, and tho trouble culminated at the Huntly mines. In the meantimo tho Government had instructed the Stato Accident Insurance Department to cover tho whole risks under tho Act without medical examination at an increased premium of 10 iier cent on the present rate of 455, making 49s 6d per cent, and 20s per cent to cover tho risk of pneumoconiosis, or in all 69s 6d per cent, tho State guaranteeing the Accident Department against \oss. Tho result of this was that mine-owners who wero not prepared to carry tho risks themselves wero forced in a great many instances to take their business from the private companies, and obtain tbe necessary cover with tho State Department. In our opinion tho State has thus by its guarantee taken an unfair advantage over private companies.”

On the motion of tho Hon S. Thorne George, seconded by Mr Clark, the annual report and balance-sheet were adopted without discussion. Tho Hon S. Thorne George and Messrs L. J. Bagnall and Charles Rhodes were re-elected directors.

Mr George, in thanking tho shareholders, said ho thought a wonderful thing had been done by tho company by recovering its position so soon after the terrible catastrophe at San Francisco, and ho believed, that tho timo was not far distant when tho company would be in a better position than ever before. Messrs J. F. Buddie and A. J. Denniston were re-elected auditors at a salary of £IOO a year each. A vote of thanks to tbe directors, manager and staff concluded the proceedings.