INSURANCE BUSINESS.

New Zealand Herald, Volume LXIII, Issue 19397, 4 August 1926, Page 9

INSURANCE BUSINESS.

THE NEW ZEALAND COMPANY. SUCCESSFUL YEAR RECORDED. WIDE RANGE OF OPERATIONS. Ihe annual meeting of shareholders of the New Zealand Insurance Company was held yesterday, Sir James Gunson, the chairman of directors, presiding. In moving the adoption of the 88th annual report, and balance-sheet, particulars of which were published in the Herald of July 27, the chairman referred to the absence of two members of the board of directors, Messrs. H. Horton and Charles Rhodes, who were out of New Zealand. He mentioned that such visits of directors to distant fields where the company operated, and particularly to London, where its world-wide interests centred, were of undoubted value to the company. Tho chairman said the result of the company's operations, having regard to the variable conditions obtaining throughout tho world, could be regarded as entirely satisfactory. Dealing with the question of underwriting, Sir James said that difficulties in conducting insurance business were as acute as in the past. Competition had at several points resulted in a decrease in rates of premium with little or no diminution in the loss experienced. It would be noted that the premium income, for the past year was £1,066.012, which showed a reduction, of £6748. The New Yorft Branch. At the last annual meeting the chairman had referred to the fact that the operations of the company's New York branch hod not been profitable. As this unsatisfactory condition continued during the year under review the directors decided, with the full concurrence of their partner in the fire businoss in New York (the South British Insurance Co., Ltd.), to discontinue writing fire risks in the eastern States of North America. Satisfactory arrangements were made under which all liabilities of the partnership were disposed of so far as direct writings were concerned as from midnight on Decambor 31, 1925. ■„ ■ The consequent cost of reinsurance had been liquidated in this year's figures. This provision had tho effect of absorbing more than the increase of premiums shown by many of the branches. While it was with great reluctance that the directors retired from the fire business in this field, they were satisfied that there was no alternative course if continuing losses there were to be avoided.

Tho company's marine business in New York was being carried on, as the directors' experience was favourable. Tho company still continued to obtain good results at its San Francisco branch, where it enjoyed generous support. In other distant centres, too, it was well holding ita connections. In South America its returns had been satisfactory, and; as was the case in many fields, the company bad valued connections in tho East. Prudence Necessary in London. The policy of eliminating unprofitable business in London had received tho careful attention of the board. While a large premium income could without difficulty be restored, yet after the experience of tho company it was deemed prudent to follow conservative lines in this centre and this course had. been adopted. The loss ratio, which last year was 56.27 per cent., had risen.to 59.47 per cent. Apart from the reduction in premium income, which had a slight effect on the ratio, fires had been general in all parts of tho world, particularly in Australia, and New Zealand. The ex{?onso ratio showed a slight increase, being 33.34 per . cent., consequent upon the lesser premium income already referred to, together with an increase of £13.047 in the total expenses. The accounts, however, had-borne practically a, year's expense at the New York branch, which would not recur. Tho surplus on the underwriting for the year amounted to £80,158, a great portion of which had been earned beyond New Zealand.

Continuing, the chairman said that the income derived during the year from tho company's investments amounted to £117,239, compared with £111.596 for tho previous period, an increase of £5643. The yield on tho invested ftfnds of. tbo company was now 5.19 per cent, against 5.11 per cent, last year. There had been a reduction in their United States securities duo to' realisation to meet the cost of reinsuring the New York business. Progress in South Africa. The item, company's premises, showed gn increase of £27.044 which was principally due to tho purchase in Capetown, South Africa, for £23,500 of a site upon : which the directors proposed to erect a gix-storey building, a suitable. portion, of which would be devoted to tho company's use. The present premises in Capetown, which had proved unsuitable for the expanding business of the company, could bo sold to advantage. Sir James mentioned that the capitalising operations sanctioned at the last annual meeting—transfers of £125,000 from the reserve fund, £15,000 from the investment' fluctuation and contingency account, and £IO,OOO from provision for taxation—had been carried out. .The paid-up capital of the company was now £1,050.000. The reserve fund last year stood, at £525,000. After transferring the £125,000 mentioned and adding £75,000, which was recommended to be placed to credit this year, this fuhd would amount to £475,000. On the question of the value of assets he said there still remained a very substantial margin to credit between the market value of the company's securities and the figures at which they stood in tho balance-sheet. In many items there had been an appreciation of value during the year, but no credit had been taken for this in the accounts. It would be the policy of the directors, whila carrying on and extending the legitimate insurance business of the company, to steadily build up the company's assets, which were so essential to its stability and lasting prosperity. Prestige o! the Company.

The trust department was making steady progress. The volume of business ' had substantially increased during the year. Not only the shareholders of the company, but the generai public, were showing that they realised, by availing themselves of its "officii, the advantages which the defmrtment offered in both its agency faciities and its trustee and executorship services at a very moderate scale of charges. The chairman assured shareholders that the company continued to enjoy the highest reputation in all fields where it operated throughout the world, and tho directors, with the support and active interest of an efficient staff, had done their best to maintain and advance tho standing and prestige of the company. The outlook in the insurance world was difficult to forecast and uncertain owing to the unsettled industrial and political conditions everywhere, and to the ever increasing keenness of competition; but throughout these difficulties shareholders could rely upon the directors continuing their efforts and activities for tho maintenance of the company's connections and for tho further expansion of its business. The directors proposed to di sjn bn tea divider,* at the rate of Is Sd pet share per year. Of that, 10d was p as ,, a £ interim dividend in February of thi. year. That would absorb £125,000, re t

quiring, in addition to tho investment income, £7763 being taken from underwriting profits. The chairman concluded' by saying that he was sure all shareholders would join with the directors in commending the excellent work done at head office and at all branches by tho company's staff. From the general manager downward the members of the staff were keen and had the company's interests at heart. t'ndoubtedly tfu company's progress in the past, and tho position which it occupied to day, was largely due to the devotion and capacity which the members of the staff had always displayed in furtherance of the company's affairs. The motion for the adoption, of the report and balance-sheet was seconded by Mr. C. V. Houghton and carried. Sir James Gunson, Mr. C. V. Houghton and Mr. 0. Nicholson, the retiring directors, were reelected unopposed. Messrs. H. Gilfiilan and F. C. Buddie were reappointed as auditors. Mr. J. Miller moved a hea.fty roto of thanks to the directors, officials and agents of the company. He said he was sure the sound judgment and wisdom of the directors was shown in tho gradual growth of the company to its present position. The directors were worthy of the thanks of tha shareholders for their conduct of the affairs of the company, especially in view of tho serious opposition in New South Wales and other conntries where an effort was being made by Labour legislation to put private enterprise out of business. Ho also mado reference to the fact that the efforts of the directors would have been of little avail without the support of a loyal and efficient staff. The motion was seconded by Mr. F. C. Carr and carried with acclamation. Thanks were returned by Sir James Gunson on behalf of the directors, and by the general manager, Mr.'lf. P. Kissling, on behalf of .tho staff in New Zealand and abroad. At a subsequent meeting of tho directors Sir James Gunson was re-elected chairman and Mr. G. V. Houghton was re- | elected deputy-chairman.