NEW ZEALAND INSURANCE COMPANY.

Otago Daily Times, Issue 12564, 19 January 1903, Page 12 (Supplement)

NEW ZEALAND INSURANCE COMPANY.

•", Cobbesponbejt.) ' '.;; -" ■ AUCKLAND, Jammry x «. The annual meeting of the New Zealand Insurance Company was held to-day. Mr Thomas Buddie presided, in the absence through indisposition of Mr A. G. Horton, ohairman. • ' .Mr Buddie, .in moving the adoption of tie report and balance sheet, said: I'hope that Mr ■ Horton's indisposition, may be temporary; and that he may soonte able to resume hie place amongst us, as we very highly value his tfise counsel ami business capacity, ohd consider that the shareholders are in no. small degree indebted to him for Ids able .conduct of the chairmatnship of the company and.for its proud position to-day. No doubt you will all be grateful at the result of the year's operations as disclosed iii the balance sheet. The leading figures show.'a substantial increase, an-1 some of them deserve a word or two of explanation oji account of their strength and magnitude. In the, first' place, the net revenue for the year from all sources reached £408,923 16s lid—the largest on record in the history of the. company. /We may point out, that our insurance' revenue is derived from both fire marine business. The increase over l^st; 1 year, when the not revenue reached £391,046 3s 7d, has been achieved by a carefully selected business, amounting to £15,473 • 17s sd, and by a very satisfactory addition to our permanent income ' through our investments, which, brought'us a total of £21,963 7s 6d from interest and rents, being , again an increase of £2404 over that of the preceding year. The total net premiums alone amounted to the , very satisfactory' sum of £386,960 9s 6d, after the deduction of all returns and reinsurances. This income was collected in various parts of the world, and has enabled us to maintain the which we have always held amongst the insurance companies in the' southern hemisphere as regards the volume • and magnitude of our business. Five years ago our premiume amounted to £283,629,'- and oiir net income from all sources'was then more than £100.000-below that 1 disclosed to you to-day.' Turning to the other side of the accounts, you will fee that our losses have been large—just about &■ quarter, of a million of money,—but there is nothing in them that calls for special comment, except that in some of the States of the Commonwealth of Aupivab'a, where prolonged drought has been keenly felt, the losses have teen above the average. This we fully anticipated, owing to the adverse conditions under which some of our branch managers had to conduct their widespread business; but, on the whole, we are well satisfied with the outcome. To give you a cjear comparison of'the results, of the last two years' operations of the company, we miy ; quote • the very satisfactory ratio of losses, expenses, and profit obtained, as follows:—Losses-1901, 63 per cent; 1902, 64.39 per cent. Expanses, 27.43 and 26.97; pjrofits on underwriting, 9.57 and 8.64. These figures, we think, will show that yonr business has boon well and prudently canducted, and reflects credit upon the company. The results justify the directors in recommending an increased dividend, which i? the highest on record for tho past ten years, which will no doubt be very gratifying to the shareholders. Shareholders will thus readily perceive the splendid progress of the company, and can judge of its continued prosperity by 'the various figures in the balance sheet. In recommending; the increased dividend, your.directors have been careful to make adequate provision; for all known' and contingent losses and liabilities up to November 39; nnd have reeommemdod an addition of £25,000 to the reserves of the company., The directors have even beqn anxious to strengthen-the reserves, because they are fully alivo to" the fact that increased premium income means increased liabilities. Those' shareholders who have carefully followed the policy of the company will-see ■that our efforts in this direction have been entirely successful. It will be remembered that at .the meeting of shareholders in January, .1899, four years ago, our total reserve fund stood at £200,000. Now they are £300,000, and yet during this'period of four years you have been paid your dividends,, and we have written off some amounts for depreciation, and have made very ample provision for' all contingent liabilities. At. the same time, we have kept our assets liquid, the bulk of them being in What may he '.erined first-class giltedecj. securities. iWe .would .particularly

call your attention to the list of investments. You will see that during the year we strengthened our financial position, and have increased our 4- per cent. New Zealand Government debentures to £70,000. Last year they stood at £50,000. Last year our British consols stood at £47;300 9s. Now they are £55,082 7s 4d, and the- price in our hooks for each £100 bond is £9} Is, the market price in London to-day being £93 2s 6d. A new item of £10,000 in Auckland HnTboiir Board debentures also, appears in the list. There is a slight decrease in , fixed ' deposits owing to the movement of funds in London, but an increase in cash and in branch agency balances. Your .properties stand about the same as last year, but during the current year the tegular triennial valuation will be miule'by'-exports, and their * result given to you at the' next annual meet- i ing._ Tho return upon oiir investments, ex- 11 elusive of the Victoria Arcade Sinking Fund, j last year was 4.08 per cent. This year it is j 4.32 per cent. As, we explained hi,our re-1 • port of a year ago, money at a low rats :' of interest is useful and' necessary, as it ! brings us good, sound, .profitable jwsiness. | The rise in value of the New Zealand and ; River Plato Land Mortgage Company's j shares is very satisfactory. As your chairman informed you last year, some of the company's then large holdings had been realised at prices above the book value. Tho ■ holding now is 10,000 shares, practically free from all liability, bringing in a good return, and wortli a considerable- premium in the market. There is very .little further information to give to shareholders. The i item of £56,717. for sundry creditors and ' unearned premiums makes provision for our j ! American business in the Western States,! where three-year policies are issued. And ( for other contingent liabilities we have ap- ! propriated liberally, and mean to continue : : this policy. We ' are more than Hitisfied ' ' with the result of our world-wido business : during the past two or three years, especially ; when we compare our experience with that ■ ' of the great British companice. Tho fire '■ '■ underwriting of these companies in the com- ' pleted fables for 1900, wo are told by a | ' well-known publication, shows that the net '. insurance profits made .for 52 companies' doing a premium business of considerably ■ '' over twenty millions sterling was only 3.12 ; per cent. In 1901 50 companies tabulated ' did almost tho same volume of business, and •■ ' actually lost nearly £25,000 in doing it. j' These figures are taken . after allowing for! one-third for the unoxpired risks. Neces-> ; sarily, the summing up of-the 1902 business ' cannot yet be made, but it is expected to ] show an improvement. In the face of these ■ facts we consider ourselves fortunate in the ' outcome of our own underwriting in .various parts of the world. It must be apparent to all of you that the profits shown in the i balance sheet could not. have been earned ' in New Zealand, and have only been made possible by the extended nature of the company's operations. We have Had good luck, but it must also be evident that we cannot owe ■everything to good fortune. Good management is to be heartily, acknowledged as equally contributory • to our satisfactory financial nosition; and branch managers and their staffs are no lea to bo thanked '■ than those of the head office, Good fortune and good management combined enable us !Snn Con S atulate you "P™ H'e bneinws of , 1902. Wo have evory hope'that it will be continued dur.ng 1903. Your directors have not lost signt of the necessity of providing better office accommodation 'as well Hβ in London, where our business, as in Auckland, is constantly increasing. Plans are new being prepared for extensive alterations in the Auckland office, and we are ting for the lease of more oommodious premises in London. It i 3 with verv sincere regret that wo havo to record the" loss of one ' of the senior directors on .the board bv the band of death-the kto Air J. L. Wilson. He held a seat on the board continuously ' from July, 1876. a period of 26 years, during which time ho took a'very aotive. intelligent ; interest in the affairs and conduct of the company, and his loss was keenly felt by his co-directors. Tho appointment of his successor was very carefully and anxiously considered by the board, and the result was the appointment of Mr L, ,1. Bagnall, whose ripe bueines? experience will, we are sure, be of great value, to the company. The appointment of Messrs Bristow and James Russell as a local board in London, of which you wire informed last meeting, has already proved to bo of great service. I now have the pleasure of proposing the adoption of the report and balance sheet. I Mr Taine seconded thcmotig,u. , : I

Mr J. Oallnan thought shareholders had every reason to be gratified at the success of last year's operations. No doubt the general prosperity of the colony had assisted in- the enlargement of the premium income her*; but the company did not rely on this colony alone for its premium income, having ramifications all over the world. Ho had hcea opposed to expansion some years ago, but in view of the Government's intention in tho direction of State fire insurance lie now believed that expansion was the beet course. The shareholders had sufficient confidence in the directors to think that they would act with the same discretion in. the future as in the past. He concluded with the expressed hope that the institution would hold its position a3 the premier financial institution of the'colony. Mr A. DulTus Lubecki said' that m.o3t shareholders were aware that ho had been in tho field as a candidate and had later withdrawn, both of these stops boinß taken as" the result of the advice of shareholders, He had been told that although he was not well known in Auckland, shareholders would welcome any proposed director who was not the nominee of the directors. Xo sooner had he Announced this than others told him that there was no hope of his securing a place unless ho was a nominee of the directors, and that proxies would be collected against him. He had not realised the forces which would be marshalled against him. Soon after ho came out it was pressed on him that it was us<?les3, and that he was giving himself and others annoyance, and might cause the directors to less favourably [ consider suggestions for amendments in tho ' articles of association. The firet of thoso . suggestions was that directors who hod boon ■ in oflice for seven years should not 1)0 clig- , ible for re-election until after a yew's retire- j ment. Some shareholders suggested two or three years, but he favoured one year. The next suggeation was that directors elected to fiil a gap should require confirmation at the hands of shareholders at the next annual meeting. In tho future it would lie desirable that tho report and balance sheet should be- brought out earlier than in the present year. Mr Duthie said that the directors had not any proxies in their hands. Mr Lubecki said that he had boon told by shareholders that directors, other ,than' tho retiring directors, had aaked them to vote for his opponents. Tho report and balance sheet were then adopted. On the motion of Mr J. Raid, seconded by Mr Isidore Alexander, Messrs A. H. Nathan and S, T. George were re-elected directors. The auditors were reappointed. A voto of thanks was accorded to tho directors, officers, and agents of the company, and it was announced that dividends are now payable.