PROSPECTUS OF THE SOUTHERN CROSS ASSURANCE CO., LTD.

NZ Truth, Issue 873, 19 August 1922, Page 3

PROSPECTUS OF THE SOUTHERN CROSS ASSURANCE CO., LTD.

The Latest Australian Insurance * Stunt.

The above company is scouring the j Dominion for «ash with -which. to carry j on its business throughout the Com J monwealth and New Zealand-. It asks for a premium of 5s per share., even while its future seems to be obscured by every class of doubt which follows upon the fact that none of the statements made m the prospectus is vouched for by a recognised actuary. The figures offered for the business results only cover a.- period of nine months. In the section headed "life department" a claim that assurances were written for £56,6,331, producing a "first pi-e---mium of £21,953 12s 3d, is made to stand for. an annual income of £23,---596." In this case the difference is £ 1643, and- as there is not a line of detailed explanation for the strange inflation' the general appearance of the proposition seems to this writer to be rather "windy." This sort of thing is, however, got through by insei'ting some personal gush about the insurance records of the wondeTful Mr Confoy, who is the promoter of the Southern Cross Assurance Co., Ltd. This flashlight m the insurance world is certainly a marvellous person, and deserves to be so rated, simply because he himseli .announces the fact. "Cambist," off his own bat," will assert that Mr Confoy IS A GENIUS; for the prospectus blazons forth thp fact that that gentleman was paid £ 1000 m cash and had allotted to him 25,000 fully paid-up preference shares of a nominal value of ten shillings' each. As the authorised share is^stie of the company is m 1,000,000 shares ot ten shillings, equal to £500,000 if fully paid, some people might consider that the little swag of shares handed over to this gentleman is a mere flea bite ' on the incorporated body of this new-ly-fledged insurance constellation. Re- I garding the preference rights attaching J to this class of share issue, there i& not a word mentioned m the prospectus. The preference rights allowed might be most beneficial to the ordinary proprietors. The point is, why does the document now under notice not contain the actual facts of the capitalisation? The omission may have been caused through lack or space, for a lot of space is given over to the publication of records of another marvellous insurance proposition — namely, the A.P.A. The affairs of th,. latter company "have nothing to do with the case" so far as "Cambist" can discover. The only visible sign of likeness between these two powerful insurance stunts, to this writer's ! view, is the fact that both of these concerns are comfortably housed m the top floors of separate buildings In the matter of life, assurance this seems to be 'a sound policy to follow m connection with a life branch. High up m the world, these concerns may be pointing to THE FUTURE HOPES of many of their, clients, the desire to reach heaven, or perhaps this location may- be .due to a covert method of testing the, hearts of proponents. Tho weak ones would drop dead on the way up, white the strong ones can both walk up or down. TJie object of the company is the "transacting of Life, Personal Accident, General Accident and House Purchase Assurance and will have power to transact fire and practically all classes of insurance business." Not a word is given regarding the possibilities of earning huge dividends on the paid-up capital. Not a word regarding the enormous costs attaching to new business written by a new company. Not a hint as to the pickings which will fall to the touters who are rushing around trying to induce softheads to invest good hard money m this affair, which is out to secure nearly every form of insurance, which the promoters have written into the memorandum of the company. But, cheer up. "Regarding tht integrity of the company, the following excerpt from the 'Midnight Sun' published m Melbourne on November 12, 1921, speaks volumes: — .'There are seven Parliaments m Australia, all elected "by the people, for the people," etc. Is there no moral responsibility laid upon them m connection with PROTECTING THE PEOPLE m this matteT? Old estabished concerns like the A.M.P. and new young companies, such as the Southern Cross, exert a healthy, honest influence m the insurance world. But there are others who do not. It is against these that the public should be protected." What logic, what powerful insight into the ethics of the ;n--surance world! How did the "Midnight Sun" come to miss the great A.P.A.? F&ncy the implication that the. "oldestablished" A.M.P. is slopping after the same wide range of insurance business that the Southern Cross is after. The whole of the "Midnight Sun" I burblings seems to "Cambist" like a midnight "burst." Between its grinding teeth it hiccoughs out its blessing upon the old-established life office, and ,the little affair which is puling upon the lap of the wicked insurance wor?d, aged at the time, eight months. How did the "Midnight Sun" get hold of the inside morals of the "young company"? Please turn round the corner and obtain special advertising rates from the manager. That is the ethical code of some of the wonderful night press m other cities besides Melbourne. But the "Midnight Coffee Stall" or the "Midnight Beer" ar* of a different kind. The "value of insurance" is becoming increasingly recognised, and is on-' doubtedly more popular to-day than ever before. Prices for ordinary com- \ modities have greatly increased, but insurance premiums HAVE REMAINED STATIONARY, and this is made possible by the increased \earning power of money, for, where premium rates have been calculated on a basis of the earning pow- | er of money at the rate of three pounds to four pounds per centum per j annum, it is now « possible to ,-am six pounds per centum per annum, or more, c.nd " a -new company is m a very favorable position m this direction inasmuch as all its funds can be invested at a highly favorable rate of interest compared to what couxd 1)0 secured a few. years ago." This slab of argument carries the tearful whine of ' sorrow through it. It reads into the financial mind of- "Cambist" a won- ' derful thought. It leads him to I weep for the "old established" duffers ' m the" insurance world, who have missed the chance of earning the blessed six per centum per annum. Ah, these young companies, are they not full of i vim and snap ? Are they not exerting "a

healthy, honest influence m the insurance world?" Really, it is time to unbutton the pockets and lash out into the splendid ..investment offered he -c. Five shillings premium is far too small a price to put upon the shares, especially as the, company has never yet paid a dividend, though it is probable that, -the .lifers may be loaded up to "earn", it for the investors. As for the other clauses of insurance to he undertaken, IT WILL BE A BIG JOB - to do all .the work. Too big to follow m. 'the space at the disposal of "Cambist." ■ • We haye enough New Zealand companies at work here to do all that can be reasonably handled with safety m assurance matters. "Keep your money m your pockets" is a sound line of argument to use to the touters who whisper premiums into the ears of investors these hard times.