THE SOUTH BRITISH.

New Zealand Herald, Volume LXIII, Issue 19471, 29 October 1926, Page 9

THE SOUTH BRITISH.

INSURANCE COMPANY'S YEAR. SATISFACTORY POSITION. THE 'CONDITIONS vABROAD. The annual meeting of shareholders of the South British Insurance Company was held yesterday, the chairman ws directors, Mr. W. R. Wilson, presiding over a large attendance. In moving the adoption of the annual report and balance-sheet, a summary of which was published in the Herajld of October 20, Mr. Wilson said that compared with last year's figures, premium income, losses and expenses were all higher, while the balance at credit of the underwriting account, £82,171, was a little less than that of last year. The larger losses were due to nothing of special magnitude, but to more claims, particularly in respect to fires in houses both in the Dominion and in Australia. Workers' compensation business also had been showing a steadily higher ratio of claims to premiums, due to increasing benefits without correspondingly higher rates. During the year, in collaboration with the New Zealand Insurance Company, it was decided not to continue .fire business on the Atlantic side of America, and the New York office, operated jointly by the two companies, had been closed. Intensification of Competition, "Competition," Mr. Wilson continued, "is getting more and more intense. Reduced insurances, caused by falling values and disturbed trading conditions, induce underwriters to extend their fields of operations. Tho result is that rates are quoted not on tho merits of risks, but merely for the purpose of getting business. The opportunity in this way of saving somo premium seems irresistibly to attract a few whose business for the time being may be lost. In the eyes of the prudent, however, the real object of insurance remains paramount—absolute protection accompanied by prompt and liberal settlement of claims. To achieve this object branch offices at considerable expense, are maintained, thus ensuring the best service, and reserves upon reserves are accumulated.

"Along these lines food for serious thought may be found in the facts that in tire accounts before you the premiums represent risks covered in the aggregate to the extent of several hundred million pounds, and that the net losses borne by this company exceed £500,000. In the light of such figures it will be admitted that the assessment of risks demands knowledge and experience in order that as the years come and go rates may be quoted adequate to meet losses and to build up reserves. That the year's surplus from operations of this magnitude is only £82,000 shows better than any words can tell how closely rates are calculated."

Dealing with the profit and loss account, Mr. Wilson pointed out that the income from the funds referred to, which made the security of a South British policy so real, amounted to £117,490. Adding the balance from last year and the underwriting surplus, gave a total on the credit side of £410,877. On the other Mde, dividends had absorbed £111,760, and sinking funds £SOO, the latter having been increased on account of additions to the company's London premises. The sum of £75,000 had been added to the reserve fund, making it-£675,000, and there remained a balance of £223,616. Premises of the Company.

In the balance-sheet on the assets side the company's properties had increased by £14,000. At London alterations to the leasehold building had been made, greatly improving the accommodation. At Durban advantage was talcen of an opportunity to purchase the premises in which the company had been leasing offices. At Capetown the company's property, being not altogether suitod to its requirements, had been sold, and premises were at present being rented. At Hamilton a borough lease of the corner of Victoria and Alma Streets—a most central situation —had been secured, and building operations would shortly be started. The leasehold site of the head office in Auckland, which had served so well for nearly 50 years, had become inadequate for the ever growing needs of the company's business. Advantago had therefore been taken of an opportunity of securing a permanent site by purchasing the block at the corner of Shortland and High Streets, negotiations for which were concluded last week. The only other item in the balance-sheet calling for comment was American Government securities, the reduction being due to the disposal of the New York fire business.

.The board of directors, the chairman idded. recommended the payment of a dividend of Is Id a share, which, with the interim dividend paid in April, would make the distribution for the year 2s 2d, as against 2s Id last year, and would leave £167,735 to be carried forward. Instability ol Trade Conditions.

"The year's results may, we think, be considered satisfactory," said Mr. Wilson, "as well by those whose savings are invested in this business as by the vast body of our customers the world over, who look to this company for sure and certain protection against a variety of dangers. Unhappily, the outlook generally is not as bright as it might be. It is at such times in particular that the policy of building up reserves makes its strongest appeal. In the Old Country trade is still seriously hampered by the coal strike, and until the mines aro in full work again many industries dependent upon coal must continue to suffer a restricted output at increased cost. In addition to the direct losses thus incurred must be counted the loss to a country like ours, the price of whoso butter and other produce is lowered owing to the decreased buying capacity of its best customers.''

Affairs in China wore still very unsettled and trade consequently disorganised. The boycott of Hongkong by Canton continued, but. the speaker trusted it was a matter of time only when the good sense of the Chinese would save them from being any longer misled by revolutionaries. In the Yangtse Valley, also, alarming conditions were at present prevailing. The company did considerable business in these fields and could only hope that brighter conditions might be nearer than present appearances indicated. Position of the Guardian Trust.

The trustee side of the company's operations, as indicated in the statement of the Guardian Trust, continued to expand. In selecting a trustee, more, perhaps, than in anything else, the qualities of safety on the one hand and competent management on the other, made their strongest appeal. On these grounds the services of the Guardian Trust were strongly recommended.

In conclusion. Mr. Wilson expressed the thanks of the directors to the staffs at home and abroad for their unceasing energy and skill. It was proposed to distribute a small bonus in recognition of their services.

The motion for tho adoption of the report and balance-sheet was seconded by Mr. J. H. Upton and carried unanimously. The retiring directors, Sir George Elliot and Sir James Coates, were re-elected unopposed. The auditors. Messrs. J. A. Duncan and N. A. Duthie, were reappointed. Professor A. P. W. Thomas moved that the chairman of directors, general manager, and the entire staff and agents be thanked for their services during the year. The motion was seconded by Mr. T. H. Barstow and carried. Mr. Wilson returned thanks on behalf of the directors,, and the general manager, Mr. P. H. Upton, on behalf of the stag.