NATIONAL MUTUAL LIFE

Free Lance, Volume XVI, Issue 872, 23 March 1917, Page 18

NATIONAL MUTUAL LIFE

TRIENNIAL MEETING. EFFECT OF THE WAR. The triennial investigation meeting of the National Mutual Life Association of Australasia, Limited, was held at Melbourne on 28th February, when Mr. Andrew Newell, chairman of directors, presided.! ' The Chairman, in moving the adoption of the report, .said : "If I had been able to foretell the world's events when we met to receive the last investigation report my anticipation of the results of the association's business. for three years just ended _ would not have been, bright. . Within six ; months'of the date of our meeting the world was at war on a scale that had never been known; commerce was disorganised; the 'money, markets _ eol- • lapsed ; old standards of Values disappeared;- and many , new and difficult /problems arose. Every financial institution -was in some way affected, and life insurance companies in a special degree. The. vajues of- the securities in t which .their millions of funds -were invested were threatened, and a new element, the/"effect of which could not be measured, was introduced into the riskof death which their policies covered. This was the state,.of affairs from the end of the first year of our trieiiniiusi, and you" can understand that those who are responsible .f&" the direction of the association's business have/ not been free ' from anxiety regarding the figures that they would have to put before you at this meeting. •' "The report contains full details of .'.what we have done, and I doubt if the • most sanguine x amongst* us three yfears ago could havtj expected such results; 'even if our "surroundings ' had been of the most favourable na~tur«, - NEW BUSINESS. ' "In new business, we issued nearly ten millions of assurances;' our. income was £4,690,298, or over £812,000 more -than the income of the previous three, years; we paid to our members, or their representatives,' over £2,050,000, which is £505,000 more than the previous figures; and we added £2,127,000 to the assurance fund. "Now, the object of the investigation which is made once in three years is to tod the net result of our operations. Every policy that is issued- and' ■ every premium that is received increases the liabilities of the association by an amount that can be definitely ascertained, and the actuary's object is to find out whether the amount that has beeii added to the fund, after, payment of all claims-and expenses, is sufficient to cover the increase in the liabilities. The report shows that the -amount added is £759,533, in excess of the amount which represents-- the increased liabilities, and the directors have decided, in , accordance with the articles of association, that this amount' •shall be returned -fco those who paid it. It is £109,519 greater than the amount that was available out of the _ revenue of the previous triennium, but it would ■have been £242,467 greater if /the liabilities had been valued on the basis "that was used v at the last investigation. STRENGTH OF THE RESERVES. "It has been the policy of the asso r •ciation at successive . investigations to gradually increase the strength of the reserves in a. way that ' was perfectly ■equitable, and would not disturb the

relative interests of the different classes of members; but this is.the largest amount tliat lias yet. been so appropriated. ' , ' ' 'You may ask where this .surplus or excess in our funds comes from. There are three principal sources from which it is derived—premiums paid by members in. excess of tlie amount required; interest received from the investments of the association in excess of the rate that it was assuined at last investigation they would produce ; and savings, owing to the rate of mortality amongst our policy holders, being less than we anticipated and provided for. "From the first an important contribution to the surplus was derived. As the report tells you, our expenses for the three years were £14,000 less than the expenses of • the preceding three years, although our income was £812,540. greater. This is a remarkable feature "of, the report, and its effect will be ; understood when I tell you that our funds are £123,000 greater than they would have been if the rate of expenses had been the same as it was ' during 1910-13. : RATE OP INTERESTI "The average effective rate of interest that our funds earned is £5 0s 3d per cent, per annum. The rate assumed in our-valuation is 3J- per cent, per annum, so that we had, a substantial contribution to 'our surplus from this source. . "The third source is the only one whose contribution compares unfavourably with previous periods. ' "Thousands of our policy-holders— •exactly how many it is impossible for me to say—have felt compelled to offer their lives in defence of the Empire and its: ideals of liberty and humanity. Up to the end of our last financial year 498 had been called upon for the full sacrifice, and our death claims were increased. . Notwithstanding these unexpect-

Ed, and, in a sense, unprovided for, claims," the total is only 77; per cent, of the expectation. ' "So much for the past. _ I think youwill admit, in view.of our records', that we have reason to face the future with the utmost confidence. The altogether unexpected events that we had to contend with did not find us unprepared. Our margin of strength and reserves were, more than sufficient, and the nature of our business is such that every addition, to our obligations in the form of a new policy adds still more to our strength. . 'It blesseth him that gives and him that takes,' for while by admitting a new member to share in the advantages of the accumulated funds the present members are conferring a benefit, they also gain by the additional contribution to the working of the organisation for the common good. ' GREAT SUCCESS. Mr. W. Madden seconded the proposal, and congratulated the association upon its great success in very extra- . ordijf&ry circumstances. It seemed that, notwithstanding all that had Been experienced, the institution's prosperity was increasing .ieally by leaps and bounds, and there was really noth-_ ing but congratulation that he had., to offer- members .jri the circumstances. The motiop'".v-as carried unanimously. The Chairman announced that bonus certificates would bo posted. *