NATIONAL MUTUAL.

New Zealand Herald, Volume LXIII, Issue 19221, 9 January 1926, Page 13

NATIONAL MUTUAL.

BB MSB iaBI

', . 1 NEW POLICIES FOR YEAH, £7,051,000. - ; The fifty-sixth annual meeting of the National Mutual Life Association of Australasia, Ltd., was held at Melbourne on December 23. In his speech the chainnan < (Mr. Andrew Newell) said:— I '"We miss the presence to-day of one < who was a regular attendant at our meetings during the last 28 years. The Hon. , Walter Madden died on August 3. A member of a family known throughout Australia for distinguished public service, Mr. Madden took an active interest in the affairs of the association. "Under the powers contained in the articles of association, the directors chose Sir David Orme Masson to fill the vacancy at the board. Sir David Masson, who needs no introduction, now offers himsolf for election by the members. "By the death of Lord Cheylesmore on July 29 wo lost, a valued member of our London Board. Lord Stanley, of Alderley, well known to Australians as Sir Arthur Stanley, Governor of Victoria, has accepted a seat at the London Board. Qroup Insurance. "The report which wo present to-day shows that during the past year the association has made very good progress. We have issued new policies assuring £7,051,000; this is £772,000 more than the amount of the new business of the previous year. For this result we have to thank OUr large and efficient staff of agents who have given us such excellent service. I would remind you that the whole of our business consists of ordinary as distinguished from industrial business. Under the industrial, policies are issued for small amounts, and the premiums, which are generally collected from the policy-holders by the agents, are necessarily at a much higher rate than the ordinary premiums. During the year we have completed several contracts for what are known as Group Insurances, whereby public schools and commercial and industrial concerns have helped to provide insurance for their permanent employees. As there is no cost of collection, the premiums charged are at the ordinary rate. When employers come to appreciate the many advantages to all concerned, of Group Insurances, I feel sure that there will be a large increase in this class of business. "In the comments which I propose to make on the accounts which accompany the report my comparisons will be with the figures of the previous year, the differences will be given to the nearest thousand. "The premiums received during the year, £2,437,839, are £249,000 greater. This is due to some extent to the large increases in the single premiums which represent payments made for policies by one amount instead of by annual premiums in the usual way; there was' an increase of some £83,000 in such premiums. "The interest and rents—after deducting rates and taxe5—£1,195.776, are £124,000 more and are equal to £5 lis 4d per cent, of the mean funds. £4,000,000 Income. "The total income, £4,278,987, is £1,018,000 greater. The increase in the single premiums and the amount received for the re-insurance of the Australasian liabilities of the New York Life Insurance Company account for a large part of this amount. "On the expenditure side of the revenue account claims under policies or payments due to the death of the persons assured, £583,974, are £77,000 greater j this is a normal increase due to the increase in the current risks. The rate of mortality was very favourable; the amount paid is only 55 per cent, of the expectation, that is of the amount of claims for which wo had made provision. "The incidence of the year's claims furnishes a striking illustration of the benefits of life insurance. Thirty-five policy-holders died dtlring the first year of assuranfcey or within 12 mMths of their acceptance as insurable lives. The amount paid as premiums to the association by these policy-holders was only £725, whilo the amount paid by the Association under the policies was £13,600. The cause of death in nearly all these cases was either accident or actlte illness. Policy Payments. "The average duration of all, the policies which became claims during the year was less than 15 years. The amount paid by the association was more than twice the amount of premiums received, and included more than £IIO,OOO which had been added to the ' original sums assured as bonuses. "For the first time ih our history the amount paid under Endowment Assurances Matured, £595,385, exceeds the amotint of the death claims. This' is indicative of the change of fashion which commenced some years ago and made the oldfashioned whole of life - assurance a provision for dependents only, considered by Some to be the proper legitimate business of a life office, give plaCe to the combination of endowment and assurance, whereby the sum assured is payable to the policy-holder if he survives a specified age or to his dependents if he dies before that age. "The total amount paid to policyholders or their representatives, £1,704,679 is £244,000 greater. "The total expenses of conducting the business were practically the same percentage of income as in the previous year, but if allowance bo mado for the cost of the larger new business the expenses of management were lower in proportion to the income. "The amount added to the funds, £2,242,090, is £745,000 greater. This large increase is partly dUe to the special items on the receipts side of 'the revenue account to which I have referred. Investment Demands. "You will understand that the revenue account, which is ih the form prescribed by the Companies Act, does not contain the whole of the year's transactions. The receipts consist entirely of whut has been called new money; they do not include any principal amounts received on iaccount of money that had been lent or invested. Such amounts are constantly falling in, the total for the year was £3,001,000, so that your directors had that amount in addition to the net increase in the funds of £2,242,090, or a total of £5/243,090 to invest at head office and the branches. "The net results of our transactions are —taking the principal items in the bal-ance-sheet —an increase of £964,1)00 in Government securities and other debentures, which ftoft stand at £10,139,000, and form about 45 per cent, of our assets. Thirteen years ago less than 6 per cent, of onr assets were invested in such securities. _ "These figures' give some indication of the extent to tfhich the borrowings of Government afid ptiblic bodies ha,ve absorbed the moneys available for investment in the hands of such institutions as ours in recent years. We have no reason to complain, the debentures are an extremely convenient form of investment.

and as long as the Government demands for money continue the rate of interest will be high, and thus as members of the association we gain tome advantage, but as members of the community wo suffer from the present abnormal conditions. "It will be better for all when the demands of the Government are reduced and the investment moneys are allowed to flow along their natural channels. Increase in Loans. "Loans on mortgage have increased by £537,000, and now stand at £6,489,154. This item, which at one time represented 60 per cent, of our assets, is now only 30 per cent. "Loans to members on the security of their policies, £2,630,646, are £438,000 greater. ■ "Loans on policies with collateral security, which consists principally of freehold property, have increased by £130,000. "Building Society shares have increased by £50,000. This is due io the increasing business of the Fourth Victoria Building Society, which required more capital to comply with the Building Society's Act. The society is in a very sound and prosperous condition. "House property is increased by £82,000. Tnis represents expenditure on our new buildings in Durban, South Africa, and in Geelong, both of which are nearly completed. xhey will be ready for occupation early in the New Year. Higher Bonus. "The year that has just closed is the last of our trienniuin, and you will be called together in February to receive the results of the investigation of the affairs of the association as at September 30 last. But we already know enough of the results to enable me to promise you that after still further strengthening the reserves the bonus that you will receive on March 1 will bo at even a higher rate than those you havo already received. "We aro proud of what the association has accomplished for the common good, and look forward with the utmost confidence to still greater things." The retiring directors, Sir Robert Gibson, Sir David Orme Mar,son, and Mr. Andrew Newell, were re elected. Messrs. H." C. Tudhope and W. M. Jar vie were re-appointed as auditors for the ensuing year. District office, 41; Shortland Street; G. D. Howard, district secretary; C. Eugene Smith, new business manager. Local district and travelling agents aro maintained throughout the Dominion.