SOUTH BRITISH INSURANCE COMPANY.

New Zealand Herald, Volume XXXVIII, Issue 11781, 10 October 1901, Page 3

SOUTH BRITISH INSURANCE COMPANY.

ANNUAL MEETING. The annual meeting of shareholders in the South British Insurance Company was held in the office of the company yesterday. Mr. J. H. Upton, chairman of the company, presided, and there was a large attendance of. shareholders. The report and balance-sheet were read as follows: — The Directors have pleasure in submitting to the Shareholders the Statement of Accounts for the year ended 31st August, 1901: — The Net Revenue for the year amounts to £248,460 1 4 After the provision made lor Losses Outstanding and adding £f>ooo to the Re-insur-ance Fund, there is a sur- . plus in the Revenue Account of £33,373 10 5 To which has to lie added the Balance from 1900 ... £30,106 7 2 Less Dividend paid in October, 1900 ... 6,462 16 0 £23,643 11 2 Making the amount at credit of Profit and Loss Accouut.. £57,017 1 7 This has been dealt with in the following manner Interim _ Dividend paid in April, 1901, at rate of '2s per share ...£6,462 16 0 Sinking Fund — Auckland Leasehold 73 0 0 Written off Office . Furniture ... 367 12 7 Written off Sundry Securities ... 935 15 0 Amount added to Reserve Fund... 20,000 0 0 27,861 3 7 £29,155 IS 0 The Directors now recommend the payment of a Dividend at the rate of '.Is 6d per share for the half-year ended August 31, 1901 (making the total distribution for the year 4s 6d per share), which will absorb ... ... ... 8,078 10 0 Leaving to be carried to the New Account £21,077 S 0 Tho retiring Directors are Messrs. W. S. Wilson and Jno. Batger, who, being eligible, offer themselves for re-election. Messrs. G. S. Ivissling and W. B. A. Morrison, the retiring auditors, offer themselves for re-election. By order of the Board of Directors. J. 11. UPTON, Chairman. Auckland, September 24-th, 1901. STATEMENT OF ACCOUNTS FOR YEAR ENDING 31ST AUGUST, 1901. Revenue Account. Dr. . £ S. d. To Fire and Marine Losses paid and outstanding .. .. .. 147,003 17 4 To Agents' Commissions, (salaries, and other expenses _ 50,267 C 1 To Advertising, Printing, and Stationery .. .. .. .. •. 4,009 010 To Contributions to Underwriters' Associations and Fire Brigades .. 3,577 19 11 To Government Licenses, Rates and Taxes .. .. .. .. . - 3,722 C 9 To Amount required to Re-insure Current. Risks, at August 31, 1901 .. 55.000 0 0 To Balance carried 10 Profit and Loss Account 33,373 10 5 £323,460 1 4 CR. . £ s. d By Reserve required to Re-insure ' Current Risks, at August 31, 190).. 81,000 0 0 By Fire and Marine Premiums (less lie-insurances) .. .. x .. .. 234,239 15 0 By Interest Received and Accrued .. 14,22) 0 4 £323.400 1 4 Profit and Loss Account. Dr. £ s. d. £ s. d. To Dividend paid October, 1900 6,402 10 0 1 To Dividend paid April, 1901 6.402 16 0 12,925 12 0 To Sinking Fund, Auckland Leasehold 75 0 0 To Amount written i>ff Office Furniture ¥ 307 12 7 To Amount transferred to Keservo Fund 20,000 0 0 To Amount written off Sundry Securities .. .. .. •• •• 0- r '*' 1"' 9 To Balance carried to Balance-sheet.. 29,155 IS 0 £63,479 17 7 Cr. £ s - d. By Balance from August, 1900.. .. 3 ',106 7 2 By Balance brought down from Revenue Account £33,373 10 5 £G3,479 17 7 Balance-sheet. Dr. £ s. d. & s, d. To Authorised Capital— 100,000 Shares, at £19 each .. 1.900.000 0 9 To Subscribed Capital— 64,628 Shares, at £19 each .. .. .. 1,227,932 0 0 Less Uncalled Capital - 64,628 Shares, at £18 each 1,163,304 0 0

To Capital Paid up 64,628 0 0 To Reserve Fund .. .. .. 140,000 0 0 To Re-insurance Reserve Fund .. So,ooo 0 0 To Reserve for Outstanding Losses .. 31,129 0 0 To Auckland Leasehold Sinking Fund 043 10 3 To Unpaid Dividend Account.. .. 3! 4 0 To Bills Payable anil Sundry Creditors for open Accounts .. .. .. 7,750 IS 4 To Balance from Profit and Loss Account .. .. .. .. .. 29,155 18 0 £858,66!) 10 7 Cr. £ s. d. £ s. d. By Landed Property ..96,442 7 4 By Loans on Mortgage . .73,709 8 0 By Fixed Deposits.. ..3:;,000 0 0 By Stocks and Debentures 2,290 9 11 By Municipal and Harbour Hoard JJebenlurts as under — £ s. d. By Auckland Ha r our Boai d 4 per cent... .. 5,0'.!0 0 0 By Au-kland City Council 4 per cent. .. 5,000 0 0 By Wellington City Council 4 percent. .. 5,000 0 0 By Dune tin .Si unicipal Deb. 0 per cent 300 0 0 By Wellington Waterwoiks C percent... 2,000 0 0 By Dttnedin M nici pa 1 Deb. 0 per cent. .. .. 4,600 0 0 By Auckland City Council 6 per cent. .. 300 0 0 By Wellington "City Council 6 per cent, .. 900 0 0 By Wellington H arboui Board -ii per cent..." .. I,B'jO 0 0 By Auckland City Council 0 per cent. .. 100 0 (1 28,000 0 0 By Government Securities as understocks. £ S. d. Cape of Good Hope ■Six 9,872 (I 7 Transvaal 5 5,159 8 n M.S. Wales »i 9,907 IS 4 Victorian aj 7,870 13 l S. Austr'lian 3.V 6,041 5 0 Queensland 3 f,BSO o<> AV. Austl'l'an 3 5,0711 0 0 N.Z. Govt. 3 2,887 10 n N.Z. Govt. 4 10,000 0 0 — 153,354 15 3 296,847 0 6 By Cash in Banks and Bills of Exchange in Transitu 18,607 19 7 315,455 0 I By Balances at Branches and Agencies 34,129 810 By Bills Receivable 1,183 14 9 By Sundry Debtors for Open Accounts 4,582 10 9 By Furniture at Offices 3,318 10 2 £.358,669 10 7 We have examined the foregoing Balance-sheet and accounts, and compared them with the Books and vouchers, and have found them to be correct. We are of opinion that the Balance-sheet is a full and fair Balance-sheet, properly drawn up, so as to exhibit a true and correct view of the Company's affairs.

(Signed) G. S. Kissi.ing, \ Auditors W. 15. A. MokiusON, J Aurtl * Auckland, 17th September, 1901.

CHAIRMAN'S SPEECH. The Chairman, in moving the adoption of the report and balance-sheet, said: —

I desire to congratulate shareholders on another successful year. The epidemic of fires which has visited New Zealand since our last meeting, and the serious conflagration which occurred in Sydney, will be fresh in your memories, and may have led you to expect less satisfactory results than those now presented. While the losses referred to have affected our company, I am pleased to say compensatory profits have reached us from other quarters, with the result that the out-turn of our business as a whole is

the satisfactory underwriting profit ° £19,153, after adding £5000 to the fund for unearned premiums. The underwriting gain is 10.32 per cent, against 12.80 the previous year. The statement of accounts speaks'so clearly for itself that I think it only necessary to draw your attention to a few of the more striking features. In the revenue account net premiums are £lo,olU more than for last year, while the revenue from interest and rents shows an increase of £1709. Expenses show an increase ot £4250, chiefly caused by payments of an abnormal character and to heavier demands for rates, taxes, and contributions to Underwriters' Associations and fire brigades, Ihe expense ratio, 26.54 per cent., is, however, 0.45 per cent, less than for the previous year. Losses show an increase of £17,786, the loss ratio being 63.14 per cent, against 60.31 per cent, for the previous year. In the profit and loss account you will notice an item of £955 15s written off sundry securities. This amount does not represent any loss or shrinkage of values, but is the premium Ave paid on sundry municipal stocks bearing a high rate of interest purchased during the year, and which your directors considered might just as well he written off. The sum of £20,000 lias been added to the reserve fund, increasing that fund to £140,000, and I feel confident that your directors' policy of strengthening the reserves whenever it is possible to do so will have your hearty approval. I am glad to be able to mention that our loans on mortgage show an increase of £20,757; municipal and Harbour Board debentures an increase of £10,000, and Government stocks an increase of £10,000, while, on the other lsand, bank deposits are less by £2500. After making the customary provision for depreciation of furniture and the Auckland Leasehold Sinking Fund, and the payment of an interim dividend of 2s per share in April last, there is available a balance of £29,155 18s, out of which your directors now recommend that a dividend at the rate of 2s 6d per share be paid. Finding that our South American business, by reason of the difficulty in the way of communication, was not capable of the same close supervision as the rest of the other fields we occupy, your directors decided to retire from that field, and you will be glad to hear that in December last we reinsured pur South American business oil very satisfactory terms. During the present session the Government introduced into Parliament a Fire Insurance Bill. This Bill was designed to create a monopoly of insurance oil buildings, and also to set up a Department to enter into fire business generally. Why the business of insurance particularly should be selected for State competition it is hard to say, except it be the intention of the Government to enter into business generally, and so to uudertake to sell flour or tea, or, indeed, any other commodity as well as indemnity, and that a start must be made somewhere. It has been said that the measure was made necessary by the tariff having raised rates in some places. The selling price of any commodity or convenience is ! governed absolutely by what it costs to j produce, and the commodity we —namely I indemnity—is governed by the cost of conflagration and expenses. Now, tariffs are always brought about by a bad state of business and never by good, and when you find twenty-six keenly-competing companies agreeing on a tariff you may depend that the condition of their business is pretty bad, and no wise or prudent man would seek to enter upon it with such conditions existing. Indeed, quite recently more than one foreign company has taken its departure, shaking the dust of New Zealand off its feet, having had enough of underwriting here, tariffs notwithstanding. The proposal to establish a monopoly is, in itself, a most surprising thing. In the middle ages that was a common mode whereby despotic Governments sought to maintain their positions, and there, are still some survivals of the system in Europe and Asia, most of all, it may be said, in the more backward countries. But it is a long day since anything of the kind existed in an English-speaking community, and it would indeed be a singular distinction for New Zealand to revive the system. I will not go into the general provisions of the Bill. No doubt the members of Parliament representing the commercial centres, especially of Auckland and Dunedin, will see to it that our enterprise is not destroyed or unduly hampered ; and it is to bo hoped that the better sense of the House generally will refuso to make it law. But while I will not further discuss the Bill I may take this opportunity of pointing out to you some of the features of the business in which we are engaged. The capital employed is of very considerable magnitude. The four companies alone whose head offices are in New Zealand possess in the aggregate a paid-up capital of £437,705; their aggregate premium income is upwards of £734,000, while the reserve funds bring their total resources up to no less a sum than £1,135,901. It is unnecessary to say to you that figures of that magnitude are not employed solely in New Zealand. In fact, the business of at least two of the New Zealand companies extends throughout the British Empire except Canadaand wherever they go, to Great- Britain, Australia, South Africa, India, China, the Straits Settlements, or elsewhere, they carry the name and uphold the credit and enterprise of New Zealand; she herself, however, contributing but a modest proportion of this large business. From those extensive fields there flow towards New Zealand many rills and rivulets of profit for the advantage of its people, making on the whole an aggregate of profit from insurance business greater* probably than that derived from any outside trade other than that of agricultural or mineral exports, and it is this enterprise that it is proposed to strangle. Great Britain, we are told, lias become rich beyond compare through the effect of her * foreign trade; at this moment the nations of Europe stand armed to the teeth to secure what they already possess, and to obtain fresh fields for the energies of their people. But in New Zealand the one really large outside enterprise it possesses is threatened with destruction by its Government. Now, I venture to express the opinion that wiser counsels will prevail, that this Bill will not become law, and that as the question is looked into it will be seen that our colonial companiesand I may here say that both of the two Auckland companies are of greater importance and resources than any company in the Empire outside the United Kingdom—are doing good service to New Zealand, and ought not to be made the objects of threats and interference, but, on the contrary, ought to excite the admiration and to enjoy the warm support of! everyone interested in the welfare of the colony. But while I do not think the Bill will pass I may point out one effect of its introduction. The announcement of the Bill caused a- drop in one week in the value of insurance stock of no less thi'ii £90.000. It is true values have recovered, and to the cool and sensible and wealthy shareholder it has not mattered, but to the poor or nervous shareholder a poor woman—and to any whose necessities at the time of fluctuation made it necessary to sell, it lias mattered a great deal, and has inflicted a loss that ought not to have been forced upon them. If, however, the action taken should stimulate the municipalities to organise efficient fire brigades, and to obtain adequate supplies of water, a great reform will have been brought about. It is largely, very largely, owing to the absence and inefficiency of those appliances that fire business is as bad as it is ; and it may safely be said that fire rates must ever bear a close relation to the efficiency of preventive appliances, whoever conducts the business* It is possible that, because the State has established a Life Insurance Department, it is thought equally legitimate to set up a Fire Department. The two things are, however, essentially different. It has been admitted that the matter of life insurance, as that of provident savings, if only to obtain State security, is a fit subject for State action. Indeed, proprietary life offices are now very few in number, the mutual principle having largely superseded the proprietary principle in life insurance. Life insurance, moreover, is something in the nature of an exact science, depending for its safety upon tables of mortality of established accuracy. Fire insurance, on the other hand, is the most uncertain of all businesses, and depends for its success upon the skill and judgment of the underwriter constantly applied to a variety of subjects, no two of which possess exactly the same features, and except under rare conditions the mutual principle has been found to be disastrous. The consideration of all these matters has given us some anxiety, but, through it all our business has progressed, and we are very satisfied to be able to come before you with so pleasant a result. That result has been brought about by the willing and hearty co-operation of our local boards at various points., by

the good service of our staff generally, and by the energy and skill of our tried friend, the general manager. Mr. Thos. Peacock seconded the adoption of the report and balance-sheet, and the motion was unanimously carried.

ELECTION OF DIRECTORS. Sir. Raynes moved, and Mr. Dyson seconded, the re-election of Mr. W. S. Wilson and Mr. J. Batger as directors, and both were duly re-elected and returned thanks. Mr. Batger stated that that day was exactly the 12th anniversary of the day he first had the honour of being elected to a seat on the Board. Looking back on the past they had seen many satisfactory balance-sheets, and lie could assure shareholders that the same policy, as far as he had anything to do with it, would be adopted in the future. Shareholders should bear in mind that the dividends now paid were not earned entirely by what was called the paid-up capital. £64,628. The company had invested funds amounting to nearly £300,000, and it was from the total funds of the company of which they all had a share that the "dividend was made, although the nominal paidup capital represented only about a fifthpart of it.

AUDITORS. Mr. G. S. Kissling and Mr. W. B. A. Mor- j rison were re-appointed auditors to the company, the former on the motion of Mr. P. A. Edmiston, seconded by Mr. G. A. Buttle, and the latter on the motion of Dr. McDowell, seconded by Mr. Paynes. On the motion of Mr. Buttle, seconded by Mr. J. Peacock, the remuneration of the auditors was fixed at £50 each per annum. VOTES OF THANKS. Mr. Lovett moved, " That the thanks of the shareholders be tendered to the chairman, directors, general manager, and officers of the company." Mr. Edmiston, in seconding, said he felt sure that the vote of thanks just proposed was not merely a matter of form, but the genuine thanks of the shareholders to the directors, general manager, and officers, who had continued year after year to produce balance-sheets such as the one now before the meeting. The Chairman, in returning thanks on his own behalf, and on behalf of the directors, said the directors did not receive it as a perfunctory vote ; they believed the shareholders had confidence in them, because the shareholders had shown their confidence over and over again. The directors felt conscious of that confidence, but it was at the some time very agreeable to be told so in plain words. The present was an arduous time for directors of insurance companies. As he had pointed out, they were threatened with altogether unjustifiable competition, one that was unsound in principle, and bound to be disastrous in its effects. He would have said a great deal more on the subject had he thought it a proper thing to do ; but he thought the matter had been laid so clearly before the country through the newspapers that there was no confusion on the question at all. The insurance companies were conducting an enormous enterprise, employing much capital and many men, and bringing resources from all quarters for the welfare of the people of New Zealand. That should be encouraged to the greatest extent. He felt they were being threatened with something they ought not to be threatened with, and that it was not only to the interest of shareholders in insurance companies but the interest of every colonist of New Zealand to resent a tax upon an industry such as was now threatened. He confessed he had no great fear of the result. He had the utmost confidence in the sense of the people at the last resort, and he did not believe the Bill would be passed. He believed wiser counsels would prevail, and that the insurance companies would be allowed to go on and conduct their business for many years to come, and he was sure the directors of the South British would endeavour to conduct their business in the future as they had done in the past. By the exercise of great caution and great care they had succeeded very well in it. In the name of the directors he sincerely thanked the shareholders for their vote of thanks.

Mr. Jas. Ivirker, general manager, thanked the shareholders on behalf of "the officers and on his own behalf. The whole of the officers took the keenest interest in the welfare of the company, and much as .the shareholders might, rejoice in its prosperity he ventured to say the staff rejoiced even to a greater extent as the company prospered. In the future his own efforts and the efforts of the whole staff would be directed as heretofore in still pushing forward the company with the hope that in time they would place it in the front rank of the insurance companies of the world. The chairman announced that the dividend would be payable to-day, and the meeting terminated.