SOUTH BRITISH INSURANCE COMPANY.

New Zealand Herald, Volume XLV, Issue 13876, 9 October 1908, Page 3

SOUTH BRITISH INSURANCE COMPANY.

ANNUAL MEETING; THE CHAIRMAN'S SPEECH. The annual meeting of the South British Insurance Company, was held at the company's registered offices, Queen and Shortland Streets, yesterday, at 11 a.m. The chairman of directors (Mr. J. K. Upton)' occupied the chair, Messrs. T. Peacock, R. A. Carr, J. Eatger, J. Edson, W. R. Wilson, and Dr. W. C. W. McDowell (directors) were present, and about 25 other shareholders attended. In all, 71,000 shares were, represented personally and by proxy. '• »".",'..,■ The report and balance-sheet of the company have already been published in the Herald. ; , : THE YEAR'S PROGRESS. In moving the adoption of the report and balance-sheet, Mr. Upton said:

I may say first of all that our operations illustrate somewhat strongly the vicissitudes to which insurance business is subject, and exhibit the tendency of it to run in cycles of good, indifferent, and bad periods—a fact well understood by those interested in fire, marine, and accident underwriting—and it will therefore not be considered surprising that, following upon several years of continuous prosperity, we should now have report for the year results less favourable than for some preceding years. Comparing the revenuo account with the previous year, it will be noticed that the net premium income is less by £15,511. To some extent this falling off is explained by lower rates prevailing in certain places in consequence of unreasonable and severe competition; to trade depression in several countries which has adversely affeoted' our marine business; but owing largely to our having given up an important section of j business winch we found to be unprofitable. I , The income from interest and rents shows a small increase of £115, and totals £29,663, practically equivalent to our present dividend ; losses show a decrease of £17,899, the I ratio being 63.10 per cent, against 65.53 per j cent, for ■ the previous year. The expenses I show an increase of £10,636, the ratio being | 32.25 per cent, against 27.56 per cent. This increase is caused to .some extent by the [ somewhat heavy expenses connected' with I turning tho company into a limited liability j concern, the expense so involved being over £3000. The applying of the principle of I limited liability to our enterprise has, owing to special circumstances, been rather an ex- ' pensive operation. The principle of limitaI tion of liability has, however, .become so generally adopted, and it secures so marly , advantages to,: investors, that it will, ; no doubt, notwithstanding the ■ expense, be admitted to have been a judicious step to have i taken. All matters in connection with this change have already been explained to you, j and tho net result is the liquidation of the I old company with unlimited liability and the i formation of the now company with liability limited. The new and the old are in every respect • identical, except that the new title is of simpler form and the nominal capital is £2,000,000, instead of £1,900,000. • The establishing of the accident department and the securing of an efficient staff and organisation—-the full benefit of which I hope will be : realised ■ later, on— also added considerably to , our expenses;' while the compulsory payments we have had to make under the Fire Brigades Act in New Zealand have formed ,an appreciable addition under that heading. In this latter connection I might mention that our contributions under the New Zealand Act range from 6 per cent v to 19 per cent, of our fire j income in the districts an which 1 fire boards exist. These fire brigade charges imposed by law are therefore a very serious charge upon our business, and the time is not far distant when there must be. a readjustment of rates to meet these charges. The underwriting ,profit is £14,763, being 4.6+ per cent, against 6.91 per cent, for the previous year. ■ ' Adding the net balance brought forward ! from last year to the r amount at the credit of the revenue account, the amount standing fat the credit of profit and loss is' £63,539. Your directors have transferred : £10,000 to the., reserve fund, and after the in-1 terim dividend in April last,; making pro-; vision for the .leasehold sinking funds, for writing off office furniture, and ; for the appropria to the staff superannuation funds, there is a balance left of out of which the directors now recommend the payment of a dividend at the "rate of Is 6d per ' share, making the dividend ' for the year i (inclusive of interim dividend) 3s per share, I and leaving £19,515 to be carried forward. Except in one particular there is very little alteration in the- investments. .',,: A block of land in Queen-street, 'Melbourne, alongside the promises now occupied by us, ; had for some time been in the market, and was of-, fered to us two or three years ago for. £25,000. ' Although we were then • fully aware that to secure- suitable accommodation sufficiently near to the commercial centre of Melbourne, it would soon be necessary to buy premises, or to buy a site and build, we thought our best chance lay in,waiting. By doing so wo were able to secure the site for : £15,000, and we now intend to proceed with' la building complete in every modern re-: quiroment, which will ; provide for. our own accommodation ': and ? : leave a: considerable portion for letting purposes, at what we believe will be?a fair return on our , investment. ' ■ ■ ■ ■ '.'■-.. * ;; Loans on l mortgage . are: £4342 less; deposits are £2500 less; and municipal' bonds are £4600' less" than they "were, while ;'; the other investments .practically remain r uni changed. '".' _ • # Depression in trade in many countries in which we operate has militated against expansion of business of the kindwhioh it is our aim to secure, while the' keen competition in every section of our business 'at all; points has made the i work; of your directors i and staff more arduous than- in ordinary times. In Australia especially, have ; the results "of our business been •, less satisfactory than usual; whilst in New Zealand^—our home field—we have again to deplore an absolute loss on our fire business, which, however, is not surprising in view of the severity of fire losses, tho utter inadequacy of fire rates,; and tho increased charges owing to fire brigade j legislation. As an indication of the unsatis- ] factory nature of fire business in New Zealand, I may mention that the losses paid by companies doing business in the Dominion have, in the Canterbury provincial district I alone,' amounted to the unprecedented j sum of £356,000 for the ; year ended August 31 last— upon £1000 a day for one j •single district. Fire losses were also severo ! throughout the rest of New Zealand, '■■ and 1 j believe that I am not far out when I estimate the trading loss this year to the whole of the companies on their New Zealand business at anything from £200,000 upwards. When we have the satisfaction ! of being able to reportas we so often have had highly satisfactory result of our year's trading, wo feel that it is only a civility to give our thanks to the general manager and staff and to our local boards at different points; but, believe me, gentlemen, at no time is the recognition of. their offorts more deserved, and I think at no time will it bo more gratefully received, than when, fighting agrtinst tho keenest competition, faoed by abnormal losses, and harassed by oppressive legislation, we have to come before you with a result wo could well wish were more favourable. Wo therefore ask you to join us in an appreciation of their work and services. Mr. T. Peacock seconded tho motion for ! the 1 adoption of tho report and balancei sheet, and it was carried unanimously, without discussion. DIRECTORS AND AUDITORS. Messrs. J. Edson and W. R. Wilson, the retiring directors, offered themselves for re-election, and, on the motion of Mr. J. McLachlan, they were unanimously reelected. Messrs. G. S. Kissling and W. B. A. Morrison were reappointed auditors, at a remuneration of £50 each for the year. Messrs. Edson and Wilson briefly returned thanks. VOTE OF THANKS. , Mr. Hudson moved that, the thanks' of the shareholders be tendered to the chairman, the directors, the general manager and officers of the company for their work during the year. t He remarked that in prosperous years, when, everything; was going smoothly, the work of: the bffieers was much lighter than when the year; hadbeen an arduous one, and the staff deserved the. warm thanks of shareholders for the satisfactory results achieved.:; He hoped that conditions during the coming" year would be such as to enable better results to be attained., ,•■ '■;_ „ ."• The motion was; carriedunanimously. :'■','■■ The chairman returned thanks on behalf of the directors,, and ;said; it :was, of course, absolutely certain that in any business there must be times of excessive prosperity ; ; -he. hoped '■;■- they -would > never experience any/ time ol , esbessivq adver-

sity: The year had not been one> <>f adversity, but one of -<. modified prosperity.It could not bo said the company had had a bad year when £10,000 was carried to * V reserve, but it was not as good 'as they, could have * wished,. and, considering the wide field of operations, it might reasonably have, been expected . to .be better, and would have been better, but for circumstances; over which the company had absolutely -no control. The msusknee companies had had tacked on to them legislation which . was disastrous . to the .-' last degree, and this had been the' ex- - perience of similar industrial enterprises, for insurance was an industrial enterprise. "• Thenet profit brought here as the result > of insurance companies' operations was ; ; greater than from any other source,; except the produpts of the .soil. New Zea- ; land was a singular country in this respect. The companies had to pay heavy ■-~ contributions, for fire brigades i and were no better off; property was not a bib safer, and the only result had been to . v/. create a lot of costly organisations, which ' cost from six to nine per cent, of the income from the fire board districts. If he might ■ venture to - look ahead, looking calmly on the whole field of business, be thought that the coming year showed a better prospect than the past year had done at the beginning. Mr. J. Kirker, general manager,, returned thanks on behalf of himself and staff. He remarked that the year had been less satisfactory than usual, but they were engaged in an industry thai could not be expected to turn out the same ratio of profit year after year. • Dividends w ere made payable immediately after the meeting. . :