THE NATIONAL INSURANCE COM-PANY' BALANCE SHEET.

Otago Daily Times, Issue 7722, 17 November 1886, Page 2

THE NATIONAL INSURANCE COMPANY' BALANCE SHEET.

TO THE EDITOB. Sib, —Your sub-leader on the balance sheet of - the National Insurance Company, which appeared in your Saturday's issue, is, I think, some? what misleading, and your initial sentence, viz., " The balance sheet of the National Insurance ' Company undoubtedly shows a worse position than that of last year," is not borne out by the ' figures in the balances of both years. :.. ' -,■ Permit me space to place before your readers an analysis of the balance sheets for the years ending 1885 and 1886. ' , The 1885 balance sheet shows t—* ": Fire and marine premiums ...» ~, $315,0)6■'•'. Losses ... ... ■■ ~ ... .... 103,968 " Credit balance ... ... ... £51,050 : Reserve required to reinsure current risks 74,155 '" Balanc?, loss on underwriting... ... £23,105 •' Commission to agents ... . ... 27,751-' Expenses of management, &c..,. ... 30,238 ■ Taxes, stationery, tad debts, ice. ... 2,545 Balance, profit for year ... ... 5,131 £88,770 Cr. ■ ' ■ "■■~. Reinsurance reserve from 1881... ... £74,15(5 • Interest, rents, 4c... ... ... 14,614 -" . . *887™ '7 The 1886 balance sheet shows':—. r. Fire and marine premium! ... ... £175,078 Losses ... ... ~. ... 136,215 Credit balance ... ... ... £38,863: Reserve required to reinsure current, risks 61,654.? Balance loss on underwriting ... ... £22,791 Commission to agents ... ... 18,160 lixpenses of management, 4c...-. ... 29,951 Taxes, stationery, bad debts, &a. ... 3,480 ■ Balance, profit for year ... ... 13,893 £88,275 Or. ■ ''■■■'.'■"■' Relrisiiranee reservo from 1885 ... £74,154' Interest, reuts, &c. ... ... ... 14,120 '■■- ... ... £88,275 ■'•:■- We have therefore a profit for 1888 of ... £13,693 Ab against a profit for 1885 of ... ... 5,131 There being a difference In favour of 1886 of ... ... ... ... £8,763 on a business of loss volume, showing that there has been a wise discretion exorcised in curtailing the business. This floating balance, or, as : it is called in the balance sheet, " Reserve re- c quired to reinsure current risks," appears not ': to be understood by many shareholders. It maybe explained that accordingto the risks outstanding at the end of each year so will this amount be increased or diminished. It is a provision made by some of the leading Homo offices and followed by the National, which I understand is the only colonial office that adopts it.—l am, &c.,Oriqinai, Shareholder. November 16. [There are several ways of putting the figures, but' wo think that, adopted by oursejves the. correct one. ' Our corre|pondoht takes'| feserte for'rcinsurancp " into account in calculating' the year's profit. This sum was. not made'aa profit during 18SG, bat prior to this year, and should not be taken into account thereforo in a comparative statement. The difference in the two sMemepts is dwin^ to thie.—Ep. 0. P. T.I