NATIONAL INSURANCE COMPANY.

Otago Daily Times, Issue 9907, 28 November 1893, Page 5

NATIONAL INSURANCE COMPANY.

• b. The twentieth annual general me^tiDg of the b< National Insurance Company of New Zealand g] was held on the 16th inst. in the company's i r offices, Rattray street. Mr J. M. Ritchie occu- c; pied the chair, and there were about 40 shareholders present. ANNUAL REPORT. : The directors submit their report and balance sheet for the twentieth year of the company's operations. The net premium for the year amounts to £88,217 ISs 2d. After making the usual provision for unearned premiums and paying an interim dividend of £6127 6s lOd there ia a surplus of £12,2315s 4d, to which has to be added alance from last year £11,207 33 3d;—£23,43S Sa d. They now recommend the payment of a further dividend at the rate of 12£ per cent, per annum for the half-year, £6127 6s lOd; and a bonus of 2% per cent, (making in all a distribution of 15 per cent, for the year), £245018s 9d; and to Carry forward, £14,8(0 3s -,—£23,438 Ss 7d. The fullest provision ha» been made for all known and unadjusted losses in the Item £7611. The Chairman said: In rising to move the adoption of the report and balance sheet, which you have in your hands, I shall not detain you long tp-day, because, in the first place, I have very little to say ; and, in the second place, because I daresay you will all be glad to get downBtairs to secure your dividend warrants, which are ready for you on the supposition that you will pass the accounts now presented to you. 'Before going on to say a word or two about the balance sheet, I should like to thank shareholders for my re-election as a director in my absence last year. I have always taken a great interest in the National insurance Company, and I hope I shall continue to do so. I feel it an honour and a privilege to hava been elected by the shareholders in the way I have been. If you will now turn to the figures in the accounts, I should like to explain first how the reserve required to reinsure the current risks is, as you will see, largely reduced_ this year. It is in consequence of the portion of that account which relates to the London risks haying been t&ken out and carried to a separate liquidation account. - The £26,706 which now remains relates solely to the busines3 in the colon; The London business ended on the 30fch of June last, except so far as the payment of sundry claims is concerned. These claims borne in later and are comparatively trifling in amount, but the risks ended on the 30th of June. This leads me on to the item "London liquidation" which brings out a balance of £6500. This amount we. are satisfied is ample and to spare for all the claims that are likely to come against the company in London in connection with the settlement of the business there, and I hope that next year the matter will have come to a final conclusion. I think there is nothing else on that side to which I need refer except that the appropriation for losses unpaid has been made full this year so as to cover everything. On the other side loans on mortgage remain much the same as last year. The interest has been paid up as usual, and we are now engaged in arranging for some fresh loans on freeholds after careful valuations and inquiry into the merits of the applications. The money on fixed deposit is less than last year, but there is & considerable balance at our bankers', which is swollen at this particular point by the fact of oar keeping some money available for the' loans of which I have spoken,' and, of course, we now expect to have_ to pay about £8000 in dividends, which will reduce the amount. The amounts outstanding at branches and agencies are considerably reduced in consequence of matters being cleared up at . London. Turning to the profit and loss account, there are one or two items on the debit ■ side which require explanation. There is the stationery written off, bad and doubtful debts, and losses on securities realised. The first item, as you will see, is the whole amount which has hitherto stood as an asset in tht company's books. We have always desired tc write this off. It seemed too trivial an asset t( have stated in the company's accounts, and w< ■ are very pleased that the results of the yeai have enabled us to write it off altogether. Ai you can understand, although the stationery ii valuable to the company as a _goin{ oohcern, and worth its cost, still ai a realisable asset it is doubtful:, om , could, hardly say what it is worsh. .Th< bad and doubtful debts have been chiefl; inourred in Melbourne and Sydney. Asyot may understand, this last year has no been very good there in that way, am we are inclined to congratulate ourselve on having got out of it as well as we have done ■ We know of no other bad debts in connectioi with the outstanding accounts of the company The loss on securities realised arises from tw items which we thought well to sell during fch year and to take out of the books; one left i loss of £200 and the other a loss of £330. O) the other side you will see the transfer previously referred to, to the London marin liquidation account. So far as the fire ani marine premiums are concerned, they are ver; much less than last year, because nothing ha come in from London at all—they are all pure! colonial premiums, and the amount is in con sequence much less than it has been -fo years past. Interest and rents remain abou the same as before, the amount invested bein very much the same. The working expense are almost in the- same ratio as hitherto, no including the taxes. Youmay call thetaxes wort ing expenses, but they are beyond onr control The working expenses come to 2983 per cent, or including taxes, 3V61 per cent. I may sa; that this question of expenses is rather. a: awkward one, and it is one that has given th directors a good deal of concern, because on ; comparatively small premium income it i extremely difficult to keep them within reason able bounds. Furthermore our experience ha been that unless we retain the very best men men of - reliable skill to look after the com ■ pany's affairs, we are apt to. suffer very much sind it is wiser, we think, to have 1 or 2 pc cent. higher charges, than sevsral per cent higher loss ratio through unskilful management The actual expenses of the company during th year have been reduced by £2263, in add; tion to £1323, which was the cost of the Lor don business, and which now disappear: ■ I do not know that I can promise yo it will be possible to do very much more tha that, for a time anyhow, and we can only hope t make up what may appear to be excessive by good loss record and larger profits. Theundei writing profit comes to £9006. Bo far a I am concerned, I am very well satisfle with that result. It amounts, as yon will se« to over 10 per cent, on the premium income and considering what has been passing i Australia, and considering, too/the extraord nary competition in New Zealand, I think the we have no serious grounds for complaint, an _ __. that it is creditable to the managers at a '" :" points that this result has been brought out. ' : do not think there is anything else I need ref( , / to with reference to the working of the past c ' in explantion of the figures, but if any shan > holder desires to. have any explanation I sha ■ be happy to give it. So much for the pas: With reference to the future, gentlemen, I d not know that we have any right to speak i very confident terms to you. There has been • ■--■'-most extraordinary outburst of competitic during the last 12 months, and it 100 l M if the colonies, and notably Ne Zealand, are regarded as the happy hun ing grounds for companies seeking insuram business. It seems as though many people hi tie idea that there was "no such thing as co price for what an insurance company give However, I think that' before long they wi come to find that there is a coat price, and thi if they sell -waxes below cost they will come 1 the same result and the same grief as any oth class of trader'who may do the same thing. Tl English companies have been especially pre , sing in the pursuit of business in New Ze; land, and I sometimes wonder whether tl opinion I heard expressed in London a ye: ago that the big English companies we: sooner or later going to swallow up tH§ whole - the small colonial fry may not be the idea L the minds of some of those who are at presei , here. I should only like to say this mm > about it, that our experience has shown th : local companies in the colonies have a dißtin • advantage and pull over the foreign ones. '' think anyone will admit that taking them i ? over they have the pick of the business—t \ business that pays best—and!that they have ' a rule, owing to their organisation and the w : in which they.are managed, greater knowled i of their work and of what is going on. Up • the whole I think'they have a distinct advt \ tage over the foreign companies. I do i I mean to say that we can make money wh '>'" foreign companies lose it, but I shouldnot be w !; prised if sometimes even that would bepossib £^__^Anvhnw I am perfectly certain if this spirit p campetition^oes' SS, vsfete?!.theoutcomem -i be, the National Insurance Company>i:u39tgc i the-waE over it. We have felt we have consid 4 able strength during the last two or three yean ■; considerable strength of our own—and f have the command of as much business a v as much of good business as will give ue < chance of doing fairly well, and at any rate '* not doing very ill, even if things are prest "? to their uttermost. Of course shareholdi j have a good deal in their power if they v -V oaly mix a little sentiment with their bu '/ ness when they are doing their insurant: '-' aud can easily give the company great i i\ vantage. The aim of the board is to keep t f ) company strong, and not only strong as regai \.l assets, but to have a good part of t ;' i profits in hand so as to assure a steady a '■) fair dividend, even supposing there should ;■, oae or two lean years. They are very anxic .:.' to avoid fluctuating dividends in future, a 'I will try to have as much in hand as will p % vent that. I think it is very unlikely, even $ -ye have bad times, that they will last loi " ? qnd if we can continue to pay level divider :■ It will be better in the interests of the sha . ■ holders, and they will, lam sure, prefer to havi -A bo. For that reason we have not increas •,*.-■ the dividend largely thi3 time, and -r have kept a considerable sum in hand; '-V\ fact a sum large enough to pay the divide | for 12 months even if we did not make penny of underwriting profit this year, a ■'? t such as with bur interest will supply us with c ;i dividend for two years if we have a very sm ;i> amount of underwriting profit to boot. '•'I think this will have the best effect ■■'• i maintaining a solid value for our shares, wh f is of great importance. I have no doubt wh ■ \ ever that the value of the National Insurai ~\ f Company's shares is intrinsically more than 1 '.' market value outside, bat Ism not sorry tl V have not taken a bound. I think it is mi

stter that they should gradually and slowly T wha icrease in value as the people become satisfied hay( lat they are a solid investment, and I firmly ther alieve that in another year or so people will I It it ecome satisfied of this and the shares will sati radually increase in value aud remain at their in i lcreased value. I have nothing more to say, IWe scept to move the adoption of the report. I don Dr Hocken said : I second the adoption of mci ac report, and in doing so I would remark pap hat the results referred to this afternoon are cus ntirely due to the great skill and diligence I nat exercised by the directors and by the manage- J enc vent generally. I hope that the gentlemen j £2< vho are here will concur in that opinion. I bul Mr J. C. Cameron asked what the expenses its n connection with the London business had I toi )een. gd< The Chairman replied that he was willing to wa jive details of co3t to Mr Cameron o? any me shareholder at the close of ths meeting, but ite sould not to do so publioly. j thi Mr J. C. Cajiehon wished to know ii the tb directors had taken into consideration a pro» of posal to capitalise the £14,000 instead of sb adding it to the reserve fund. t I mi ,The Chairman said that they did not intsnd a to add the money to the reserve fund, but to I wl keep it available for maintaining a Bteady Ito dividend should it be required. ht Mr J. C. Cameron wanted to know if the j to question had been brought up at the board. Isi The Chairman said he was not going to tell in anyone what occurred at the board. He must al decline to answer the question. I tt On the motion of Mr Cameron, sen. , seconded I by Mr Tynan, Messrs A. Burt, R. Wilson, and ai W. J. M. Larnaoh were unanimously re-elected ft directors, and on the motion of Mr. Hoodie, p Messrs T. Callender and A. G.Fenwick were o re-appointed auditors, also unanimously. j tl On the motion of Mr J. W. Bbindley, a h hearty vote of thanks was accorded the directors ti and officers for the successful conduct of the n company during the past year. I li The motion was carried ntm. dis, 8 ■ In replying, the Chairman referred to the I c extreme loyalty shown by every member of I t the stafi to tha affairs of the com- c pany. Taking them all through, he thought f shareholders had every reason to be satisfied t with the men who were working for the i company, from Mr Williams downwards, and j it gave the directors great pleasure to have such { men working under their guidance. i