CITIZENS' LIFE ASSURANCE COMPANY, LIMITED.

NZ Truth, Issue 92, 23 March 1907, Page 3

CITIZENS' LIFE ASSURANCE COMPANY, LIMITED.

A Big and Busy Institution. The annual general meeting, of the Citizens' Life Assurance Company, Limited, was held at the Head Office, Citizens' Buildings, corner Castlereagh and Moore Streets, Sydney, on Friday, the 22nd of February, at noon, m the presence of an influential body of shareholders. The general secretary having read the notice .convening the meeting, the balance-sheet, the directors' report, and valuation reports were taken as read. TWENTIETH ANNUAL REPORT. . The Directors 1 of the Company have pleasure m presenting their annual report, together with th!e revenue accounts and,' bnlancersiheets' for the year 1906, which completes the Company's Fourth Quinquennium. I FUNDS.' The Funds, as at 3 1st December, 1906, amounted t 0 £1,802,600 9s 2d, the uncrease for the year being £264,237 7s 3s, the largest yet recorded. The amount of funds at the end of each quinquennium was \—r . . .., i, i -J -j — _; : ; ■■ - '■ • a t'nn/i 'nt Ordinary ■'■ Industrial At end of ,, Branch., Branch. ■ . £ s.d. £ s. d. Ist quinquennium 189] . 8,993 9 1 106,164 14 1 2nd "quinquennium 1896 110,510 14 2 IS4 ( 6M 9 8 2rd Quinquennium 1901 491,600 16 4 398,817 7 8 4th quinquennium 1906 1,239,757 8■; 562,852 0 7 Total of Ist quinquennium ... £115,158 3 2 Total of 2nd quinquennium ... 295,115 310 Total of 3rd quinquennium ... 790,448 3 0 Total of 4th quinquennium ... 1,802,609 9 2 ' INVESTMENTS. The average rate of interest earned by the funds (including paid-up capital) was £4 8s 3d. The rates of interest earned during the recent years are :— Year 1902, average rate 1 of interest, £4 2s 8d ; year 1903, £4 5s 3d ; year 1904, £,4 8s id ; year 1905, £4 95 .3d; year 1906, £4 8a 3d. . . Every penny of due has again been actually collected. The large investment -.in Government securities has resulted m a slight reduction m the interest yield. The following table shows how the assets were distributed at the end of the year, and a^so the proportion of each class of security . to the total :— ASSETS AT DECEMBER 31, 1906. -. Percent, £ a. d. of Total. Government Securities, ' Municipal Loans and De- .. bentures, and Loans to Local (So veming Bodies 904,144 6 10 „. 49.75 Mortgages ... 528,327 12 10... 29.07 Freehold Properties ... 204,559 18 0 ... 11.26 Leans on Policies (within . their surrender value)... 103.550 7 0 .... 5.69 Outstanding Premiums on . Policies m force ... .:. 25,753 811 ... 1.42 Cash m Bank 17,495 2 4 ... .96 Interest Accrued— not yet due ..: ... ... ... 17.284 15 5 ... .95 Sundry Debtors, etc. ... 15,572 13 7 ... .86 Acents' Balances ... ... 823 3 9, ... .04 Foreclosed Properties ... Nil .., — Mortgaged Properties '■ m Possession .;'.'... -.j. : Nil ■■> <.. — Interest Outstanding , .... Nil „.' — Deferred Instalments of Annual Premium ... Nil ... — Office Furniture and Fit- ■ : tings... ... . ... .„. , , Nil f ... — I j • ■ ;.■ £1,817,511 8 8 ... 100.00 CHAIRMAN'S ADDRESS. , • "The 'Chairman ; (J.ohn ,'J: Gkirvaji, Esq.), before moving the adoption of the report and balance-sheet for the year ended December 31, 19(H5, said : The directors' report says nearly all that need be said concerning the results of last year, iNo office has ever achieved finer things. Our investments are so. good' that every penny of interest due was fully collected within the year. The increase m funds , was the la-rgest: on record, and we are now making, leaving out of consideration the sale of annuities, a larger 'increase m funds than any Australian office with one exception. Our new business has been. well maintained, and is written.^un4er tables that are hig-hlv profitable ro the company.. Our expense rate is „ the envy of all insurance managers. We have established a world's record for industrial branch expense rates, and m our ordinary branch we 'are already within 1 per cent, of the lowest Australian rate; and 10 percent, less than, the next best Australian office. This year we promise to work our ordinary branch at 10 per cent, of t£e premium tncome-^an Australian record, and 4 per cent, less than the expense rats .of any Australian office last year 1 . • Our death claim experience has been particularly satisfactory , and evidences our care m insuring only the best lives. We never hesitate to decline' & doubtful life. •■ All business introduced m 190.6 has been valued on a 2£ net premiita basis, an assumption that leaves a very, wide margin for profit. We send, home every -year the fullest particulars to enable Mr R. P. Hardy to make a "check valuation m London. We have also invited Mr Hardy to come to Sydney 'this year and make a complete valuation on the spot. Mr Hardy is. acknowledged as one. of the world's greatest iictuaries and the wisdom of the course of submitting our affairs to him is fully appreciated by our policy-holders. The motion for , the adoption of the report was spoken -to. by Mr • Frank Coffee, and' then put to the meeting and carried unanimously, .NTCW BUSINESS. In the ordinary branch the number of new policies issued was 6695 assuring the sum of £1,040,704 and producing a new Annual Premium Income of £3 6, ©0S 18s Sd, EXPENSES. The Expense Rates for the years 1904, 1905, and 1908 are :— Industrial Ordinary Both Branch Branch, Branches. Pr. c'nt Pr.c'nt Pr. c'nt'Pri cnt Pr.c'nt P.c. 1904 46.9 4-2.8 15.95 13.3 30.6 20.G 1905 44.0 39.6 15.90 13.1 .23.8 2-1.8 3906 38.6 33.7 15.41 12.51 25.7 21.7 The expense rate of the Industrial Branch, vie. :— 38:6 per cent, of the premium income, is 5.4 per cent, less than the, rate for the previous year, and creates a world's record m the matter of low expense rates. The similar rate for the Prudential, of London, the most successful of the Old World's Companies, was 39.9 m 1905. For the current year the Ordinary Branch will be conducted at an exnense rate of 10 per cent, of the premium income, the lowest rate m Australasia.

The claims were :— jßy Death of By Maturity nv>taL Assrced/Jof Policies. ■>■<«"• Ordinary Branch £25,775 19 5 £9,154 OU £35,630 0 4 Industrial r Branch 25,426 1 5 12,973 13 2 38,399 14 7 Total ... i 651,202 010 £22,727 14 1 £73,929 14 11 The number of free policies granted during the year m the industrial Branch was 1317, and the number m force at the end of the year, 10,931, The number of free policies under which claims were paid during the year was 205. Since the establishment of the company, £1,099,399 0s 9d had been paid to policy-holders or their beneficaries. STABILITY OF THE BUSINESS. The average duration of the Industrial Branch policies m force at the end of the year was 8.1 years, as compared with 7.6 years at the end of 1905. Considering the age of the company— twenty years—this record is unparalleled. The Prudential of London was 48 years old before it secured such a result. ACTUARIAL VALUATION. The valuation of the Ordinary Branch Policy Liabilities has been made on. a . strictly pure, premium basis, with an estimated interest yield of 3 per cent., except for policies issued after December 31, 1905, where the interest yield was estimated to be only 2f per cent. With other additional reserves, the net result is that the reserves for policy liabilities are greater by £15,000 than would have been the case had the principles— conservative as they were— that were allowed last year been adopted. The company is the fast m Australasia to employ so • low an estimated interest yield as 2f per cent, m the valuation of policy liabilities. The recently compiled British Offices OM table was employed m the valuation of policies issued after December 31, 1905. Of the surplus of £50,384, it. is recommended that reversionary bonuses m respect off the one year, 1906, varying; from £3 to £l 5s per £100 of sum assured, bo allotted the holders of immediate bonus policies, and £1083 be carried forward. The amount c'f cash profit distributed for the three years, 1004, 1905 and 1906, is £135,6158. It will be seen from the Valuation report that the company is earning considerably larger profit than is required <fco pa.v its present rate of bonus. The Directors think it wise to build up and maintain stronger reserves than those of any of the company's competitors,