NATIONAL MUTUAL LIFE ASSOCIATION.

New Zealand Herald, Volume LXVIII, Issue 20768, 10 January 1931, Page 5

NATIONAL MUTUAL LIFE ASSOCIATION.

SIXTY-FIRST ANNUAL MEETING

RECORD ISSUE OF POLICIES

(Published by Arrangement.)

At the sixty-first annual meeting of members, hold on December 16, IS3O. tl:o chairman of directors, Sir John MacP'nrland, stated that the interest earned by the association for the year was £1,895.019, arid the total income £4,983,877. In moving .the adoption uf the report, Sir John MacFarland said : "Although conditions were not favourable during the financial year which ended on September 30 last for the expansion of our business, we issued 21,052 new policies, which is the largest number issued in any financial year. The total sum assured was £8,870,937 for assurances, and £330,025 for endowments. The ordinary premium income was £3,087.913, or £148,000 more than in the previous year. Total Interest Earned, £1,005,019. "The lolal amount of interest earned in the year was £1.835,019. This is, perhaps. the most, important of the factors which contribute to the welfare of the association. If our funds did not earn interest we should bo unable to meet our liabilities to policy-holders. A large proportion of each year's receipts is actually used to meet the obligations of that \ear, and any portion that is left over is credited to our policy-holders in the form of bonuses or additions to their policies. On this item Governments have levied taxes in different forms, which reduced tin? interest, to £1,739,176, as shown in the revenue account. This net interest is oqtial to £5 6s lid per cent, of the average amount of the assurance fund for the year. In 1929 the rate was £5 6s per cent. We have done well, I think, to show an improvement in this item. In the valuation of our assets and liabilities it is assumed that the funds will earn interest at the rate of 3 per cent, per annum. Whatever they may earn over aiul above this rate is the interest which is credited to members to provide those additions to their policies to which 1 have referred. The total income for' the year was £4,983,877. "Another important factor in the affairs of the association is the rale of mortality among its policy-holders. Last year 1 was able to inform you that the amount paid in death claims was less than 60 per cent, of the amount that would have been paid if the experience had been equal to the expectation. This year our experience has been still more favourable. Although the amount at risk was about £4,000.C00 greater than it was in 1929, the death claims were £45.000 less they were in that year. A favourable experience means that we will receive more premiums and the funds will remain in the hands of the association to earn interest for a longer period than the tables of mortality led us to expect. Over £2,500,000 Paid to Policy-holders.

"The amount paid to policy-holders in casiv or in repayment of advances on the surrender of policies was £739,953. The amount so paid in the previous year was £351,811, or less than half this year's total. The increase of this item is not of special significance; it is hugely'accounted for by the surrender of a few large policies which, having served their purpose, were no longer required by the holders. The surrender of these policies did not mean any disadvantage to the association. The total amount paid to members or their representatives was £2,559,111. which is £466.000 more than the amount so paid in 1929. The amount added to the assurance fund as the result of the year's transactions was £1.973,792. "The principal changes in the balancesheet compared with 1929 are: A decrease of £601,000 in Government securities, an increase of £1,330,000 in other public securities, an increase of £409,000 in loans on mortgage, and an increase of £604.000 in loans to policy-holders. Since the closa of the books the amount invested in Government securities has been increased by £750,000. " I think we have reason to be satisfied with the results of this year's business. The conditions have been, and are, difficult in every part of the world, and we have our own peculiar problems to solve. But this has happened before and we have no reason now Lo doubt what the outcome will be.

"This is not ;i place for party politic?,, but I may say that if our legislators will announce a definite policy of sound finance with rigid economy and reduced borrowing, we will soon find a solution, although it may not be a short and easy one. The principal obstacle to our recovery is the general want of confidence due to the feeling of uncertainty regarding the intentions of the Governments. If that were removed, with the co-operation of all sections of the community, our difficulties would disappear."