INSURANCE YEAR

New Zealand Herald, Volume 78, Issue 24104, 24 October 1941, Page 3

INSURANCE YEAR

THE SOUTH BRITISH EFFECTS OF WAR ECONOMY PROGRESS IN FOREIGN FIELDS "As iho fruit of many years of painstaking organisation, the statement presented on this occasion quite outstrips anything previously achieved," said JNIr. Y. J. Lamer, chairman of directors of the South British Insurance Company, Limited, at the annual meeting yesterday. About 40 shareholders were present. The chairman pointed out, however, that it would he a mistake to regard the figures as the result of one year's effort. For a considerable period right up to the outbreak of war the firm had steadily enlarged its borders, while consolidating its position in the fields already under cultivation. Jt was only because of the organisation built up in distant territories that the company had been in a position to take advantage of the exceptional opportunities which presented themselves during the past year or two. Revenue From War Risks "While revenue has gained appreciably by the extra charge for war risk under marine policies, the amount from this source is probably not as great as some shareholders might think," said Mr. Larner. "The British Government has afforded relief to insurance companies by providing war risk cover on all shipments between Empire countries. There is no doubt that the state oi world-wide war in which we have been living for the past two years has caused a considerable influx of revenue in many directions. In the marine section the prevailing conditions have imposed additional hazards of navigation. To meet these a general surcharge on the normal rates has been universally adopted. ''lncreased industrial activity has involved additional insurance, in both lire and workers' compensation. This has been counteracted to some extent by a falling off in motor-vehicle policies. "Some of this abnormal premium income will sooner or later fall away,, and we shall welcome the day wher; war risk premiums no longer figure in our hooks. We may count upon being able to make up for their absence by the extension of business under peacetime conditions." Income Reaches £2,000,000 Mark Dealing with the accounts, the chairman said that premium income, £2.145.516, showed an increase of £.193,038 over the previous year. This was the first time in the company's history that it had reached the two million mark. Total losses rose by about £17,000, but, on the larger income, the percentage was more favourable.. Expenses rose very sharply. Of the increase over last year of £183,000, over £143.000 was accounted for by taxation, swelled by excess profits duty. The balance carried forward of £252,921 exceeded the previous year's surplus by nearly £69,000 and eclipsed anything hitherto realised. Fixed investments, comprising the main interest-earning assets, totalled £4,851,851, a rise of £719,000.. Payments for the new 5-storey building at Durban occasioned a rise of £24,146 in fiie amount appearing against premises. The branch occupied its new quarters on August 30. First-class tenants were secured for practically the whole of the building before its completion. War Loan Contributions Government securities rose by £'515,000, after writing down to a purely nominal figure Japanese securities, which stood in the books at £24,500. The new investments consisted largely of British war bonds and subscriptions to new war loans issued by the Governments of New Zealand, Australia, Straits Settlements, India, South Africa and Canada. Referring to the restrictions imposed by various foreign Governments on assets belonging to nationals of other countries, the chairman said that, in addition to writing down securities, it had been considered prudent to exclude any frozen balances from the assets. They had, in effect, been treated as bad debts for the time being. The company had no landed property in those countries. Commenting on the year's dividend of Is 9d a share and a bonus of 6d, Mr. Larner explained that the pure dividend was practically covered by interest earnings. It was simply interest on funds accumulated over a lifetime for the protection of policyholders. The underwriting surplus was so much greater than usual that it was felt " shareholders might well receive something additional. The bonus had been made possible by successful trading in distant lands, with very astute people of a different race. Work of Staff Appreciated In expressing his hearty appreciation of the efforts of the company's capable staff throughout the world, the chairman paid a special tribute to the small head oflico staff. Although the volume of work had increased enormously in recent years, their number was practically the same as 20 years ago. A staS bonus of 10 per cent on salaries had been provided for. Over 100 members were serving with the fighting forcer*. They were included in the bonus, and the company was making up any difference between their service pay and their normal salary. • The report and balance-sheet were adopted, and the retiring directors, Messrs. Larner and S. Austin Carr, were re-elected. A hearty vote ot thanks to the directors, staff and agents Mas proposed by Mr. A. G. Luna and carried with acclamation. The chairman and the general manager, Mr. James .Morton, responded.