THE SOUTH BRITISH

New Zealand Herald, Volume LXIX, Issue 21325, 28 October 1932, Page 10

THE SOUTH BRITISH

The accounts presented to shareholders of the South British Insurance Company at the annual meeting yesterday reflect the adverse conditions under which insurance business, like every other form of commercial and financial activity, is labouring. The same difficulties as those noted last year have still to be faced; lowered values, sluggish trade, severe unemployment, idle shipping, motor vehicles laid by —all these things combine to reduce the gross premium income, and since it is not possible to lower expenses to the same drastic extent, underwriting profits must necessarily be smaller. Another fall has had to be. chronicled, in income from interest and rents. As the acting-chairman remarked, investment of funds is t the most important duty of the board of directors. He added that unremitting attention was devoted to solving the constant problem of conserving the capital funds that furnish the security of policy-holders, while obtaining for the benefit of shareholders a fair return for their investment. The small reduction shown for the year, in face of many circumstances, including legislative interference with the yield of all classes of investments, is the reward of that care and prudence in handling these funds. For 40 years the company has observed the principle of regarding underwriting profits as capital, and utilising only the return from investments for annual distribution among shareholders. This year there has been a departure from it, the amount absorbed by the full year's dividend being slightly"in excess of the investment income. The view of the directors that to reduce the halfyear's dividend for the sake of the small sum involved would savour of slavish regard for literal exactitude is understandable, especially when it is pointed out that in past years sums far in excess of the dividend allotment have been received from interest and rents. The fact that only so small a departure from normal procedure has been required by conditions which have shaken many other enterprises to their very foundations is eloquent of the essential strength of this great company and of the prudence with which its resources have been husbanded and safeguarded in past years of buoyant prosperity.