INSURANCE BUSINESS.

New Zealand Herald, Volume LIX, Issue 18170, 16 August 1922, Page 6

INSURANCE BUSINESS.

THE NEW ZEALAND COMPANY. CHAIRMAN'S ANNUAL REVIEW SATISFACTORY POSITION. The annual meeting.of shareholders of the New Zealand Insurance Company, Ltd., -wras held yesterday, the chairman of d'ireotors, Mr. Charles Rhodes, presiding. In moving the adoption of th». report and "balance-sheet, particulars of which were published in Uie Herald of August 8, the chairman said shareholder!! would rememoor that at the last meeting referenco was made to the unfavourable prospects for insurance companies and to a period of bad business that seemed inevitable. To soma extent this forecast was borne out in the results ior the year. The underwriting profit was less than it was last year, but considering the times they had been passing through he thought shareholders would admit it was, on the whole, quite satisfactory. An examination of the affairs of the majority o£ the large insurance companies revealed an exceptionally bad year and tremendous reductions in premium incomes, particularly in marine business. Reductions of 30, 40, 50 and up to 75 per cent, could bo found in the marine figures of the largest English companies, and as a matter of fact, the total reduction in premia. under all headings for ten of those companies was no less than £11,500,000, and in most cases profits were very seriously affected and sometimes non-existent. Not only was volume of business reduced, but competition for business brought about many complications and adversely affected tariffs and general terms of cover.

The Underwriting Business. The premium income of the company had fallen by £187,615, representing a reduction of 14.71 per cent., a good proportion of which was duo to restriction of business in Loudon. There was, of course, also the reflection of a generally reduced business in lino -with the worldwide experience. Happily, however, the company was able to maintain its usual dividend of £100,000 a year, add £35,000 to reserve account, and keep the carry forward up to £104,800, which was within £500 of what it was last year. Interest and rents had yielded the company £94,036, against £98,466 last year. This was a reduction, but it must be re- ; msmbered that the transfer early last year of £63,000 of the securities to the Trustee Department for the newly established Officers Pension Fund, had had its effect on the interest income. The i interest account also suffered by the reduction in the assets caused by the payment of £80,000 from the fund for unexpired risks, which was reduced from £625.000 to £545,000 due to the lessened premium income. The rale per cent, which the company had earned, namely, 4.65 net, averaged very nearly the same as last year. The underwriting : losses showed a percentage of 69.55, against 60.29 per cant, last year, and the uuderwritine: surplus for the year was only £40,396, against £72,158. This was due* to the causes he had previously mentioned. Curtailing London Business.

The company's London office had had :. the close attention of the directors for some yea.rs past, and owing to the un- . satisfactory nature of business there consequent * upon post-war . conditions the board decided upon a policy of gradual but drastic curtailment. At the present moment the general manager was going closely into matters with the London representatives of the company. The new policy made the directors more hopeful as to future prospects in that difficult underwriting territory. Tt was with great regret that the directors had to record the death during the year of Mr. S. Thome George, tvho was a director of the company for 22 years, and many times presided at the annual meetings. He gave most valuable services which were gladly acknowledged and placed *on record. The Hon. A. M. Myers, whose affairs had taken him to London for the present had been appointed, while there, as local director, and the company therefore continued to have the benefit of his long Dominion experience. Some time ago the board took, the opportunity of securing the services of Mr. J. H. Gnnson as a director, and! as its number was now eight, exclusive of Mr. Myers, this; was considered a sufficient strength in the meantime. Investments and Stecurities.

The board, as nsuaii, had carefully examined the investments and was satis-

fied that they were fully worth the prioes they stood at in the books. Indeed, in some securities then* might prove to he .an appreciated value. He bad already mentioned the fact that the volume of assets had been reduced by the payment of £(33,000 to the pension fund, and £80,000 from the unexpired risks. The company had, of course, the addition represented by the £35,000 carried to reserve account.

Reference was then made by the chair- J man to a proposed partnership with the j South British Insurance Company which was forecasted at the last annual meeting. A circular was issued to shareholders six months ago stating that when fell investigations of the position 'had been completed, and| which jpjroved a longer ana more difficult job than anyone expected, it was found that the suggested arrangement would involve greater capital adjustments by both companies than were originally contemplated, and it was agreed to drop the proposal. This did not affect, in any way, the New York partnership with the South British Company, nor the very friendly relations which it was sincerely hoped might always continue between the two companies." Tribute to the 'Staff. Shareholders would, the directors felt sure, willingly endorse the commendation on the. good work done by the staff during the past year. To maintain the returns at such a level as they had done against the fierce competition and deflation of values to which thev were subject spoke volumes, and the directors rould not 100 warmlv express their appreciation of the zeal and loyalty which trie stall had shown from managers down to the latest cadets. Esprit de corps in" its offices was undoubtedly a fine asset to any company. Maintenance of good reeling was most, important, and the directors felt that the company's efforts nv STSfc ,l ST 5 fuUy to •3 ftf. • £ T « erc was som& evidence of this in the officers' pension scheme which shareholders so heartily endorsed last year and which was greatly appreciated by all the staff. t* doubl-dT a S the years went on and the provident fund was built up. the benefits would become more and moro attractive and be increasingly valued. The motion for the adoption of the reMr MA Clark* W3S Becond * d b - v ,V*/£ Kai D " Pck V a , id th 6 Particulars in the balance-sheet of the working of the trusts branch were very meagrf, there being nothing to show'whether it was wJftA 1 ?? 5? a ? ain - H e had also heard that the directors had sold the Vic- ! ~l™ A ?<* d «, Md thought shareholders were entitled to information on the subject. . chairman said the statement in the baJance-sheet regarding the trustee branch was strictly in accordance with what was required by the law. As far a* profit and loss was concerned the branch was at present just about holding its own. Trustee departments in other institutions had taken years to build up and it was considered the company's branch had developed "»ery quickly. Regarding the Victoria Arcade, the sale of that took place more than ft ye« .ago.. It was sold because it was

«— m H..11 I . „ found that under certain legal conditions, the graduated land tax and other taxation, it was more beneficial to the company to have its money in another- form. The arrangement now existing was productive of more benefit than the Victoria Arcade was when the company owned it. The arcade was, he pointed out, a leasehold property. Mr. Lubecki asked where the amount realised from the prqperty was, and the chairman rep/ied that it was merged in the otLor assets, most of it being converted into war bonds. The report and balance-sheet were then adopted. The retiring directors, Messrs. M. A. Clark, H. Horton and G. H. Wilson, were re-elected, on the motion of Messrs. P. A. 'Edmiston and J. Raynes. Mr. Clark returned thanks on behalf of himself and his confreres. Messrs. H. GUfillan and F. C. Buddie were re-appointed auditors. A. hearty vote of thanks to the directors, officers and agents was proposed by Mr. George Winstone, senior, who referred to the difficulties encountered during the year and said the fact that the company was in such a good position to-day was, no cioubt, due to the attention and energy devoted to the work. Mr. J. Raynes seconded the motion, which was carried. In acknowledging the tribute on behalf of the directors, the chairman said the company could not always have a record balance-sheet, and the one presented that day was not a record, but, still, it was on® they had good cause to be thankful for. He' had looked at the balance-sheets of other companies and on the whole it might be p-aid the company was almost unique. Mr. A. I. Johns, inspector to the company, replied on behalf of the officers and agents, and said he could assure shareholders that the staff was second to none in loyalty and zeal. It was announced that the dividend was now payable at the branch office. At a" subsequent meeting of directors Mr. Oliver Nicholson was elected chairman for the ensuing year. An apology for the absence of Mr. Nicholson, on account of indisposition, was made by Mr. Rhodes at the general meeting.