THE NATIONAL INSURANCE COMPANY.

Otago Daily Times, Issue 14378, 23 November 1908, Page 4

THE NATIONAL INSURANCE COMPANY.

It is satisfactory to find that the annual statement from the oliair at the general meeting of shareholders of the National. Insurance Company continues 'to he received with the absence of criticism which is one of the most reliable indications of approval. Last week the chairman was able to announce that the outcome of the. year's .operations halt been an improvement on that of the previous year, revenue having beea somewhat better, ami losses a few- thou, sand pounds less, and that while :th« usual dividend had been declared, it-had been possible to.-increase■'the reserve fund by £15,000, as compared with. £10,000 in the previous year. As it is just six years ago since the reserve reached the total of £100,000, and as ib now amounts to'£lßs,ooo, the director? cannot, be .ace-used' of having neglected i the prudent policy of making provision! for the contingencies which are cver'.a source of anxiety to insurance companics, and from, the effect of which none, can long expect immunity. , The National Insurance Company was peculiarly fortunate, it .'seems, 'in escaping very serious loss in the operations of its five department through the disastrous conflagrations of which the Dominion was the scene within recent recollection. This circumstance was ascribed by'Mr Kempthorne very much to good luck, but the Eon. Mr Sinclair do doubt sounded a. correct ndte in emphasising the valuaW.service rendered by careful'management and sound judgment in' contributing-' to this happy result. That a decade of prosperity and good fortune is,, as Mr Sinclair suggested, less'a cause for unnecessary optimism than for a,determination-, to strengthen tho financial position of \ the company js, howover, an atgument/ ,v:luflb shareholders should find entifely reasonable. Fire insurance-Va. ''proverbially uncertain business, and there is never a- conflagration/of magnitude that does not threaten, if not actually bring about, the annihilation of some of the weaker concerns. New Zealand is, unfortunately, somewhat notorious as a land of $ie& and, it is. .to be judged frbm calculations ( that are published on authority from time to time, the insurance loss on fire per head of population in the Dominion is considerably in excess of that in older and more populous countries, not excluding the United State. The chairman of the South British Insurance Company was-respon-sible the other day for the statement' thatv the losses paid in the Canterbury 1 district alone by companies, doing business in the Dominion the exceptional feum 6f £356,000 for the year ended on the 31st August last, and heestimated the trading, loss to the whole of the companies on their New Zealand business at anything from £5100,000 lipwards for tho Whatever cause the National Insurance Company has to congratulate itself, as compared 'with some of its .'sister companies; the wisdom, however, of making every possible provision against, reverses, is-' apparent, It iiot surprising to find the chairman more than hinting that the insurance companies doing, business in New Zealand may be compeile'u' ill the near future to raise their rates. This course will, .-apparently, be revered necessary by the additional levy that is How being made upon them in the shape ; of compulsory payment towards the': inaintenancc of fire brigades, This result has not beeil unforeseen or tinprophesiedj.it is, indeed, only the natural outcome of the'policy under which the Fire Boards have 1 been brought'into existence. In this conriec, tion th e fact may be recalled that the last annual report of the State Fire Insurance Department contained a very definite admission that the rates .of premiums for fife insurance in New Zealand" Were too low, this conclusion being based on the results'.of-the operations °of tho. State Office over a period of three years. On one fact the of. the .National Insurance Company may cer* ; tainly congratulate, that a cardinal feature of the financial policy of .the compaiiy \ that dividends shall be provided mainly out of'income derived from invested funds. Adherence to this principle is, undoubtedly, a, most influential factor in. the financial strength. and power of recuperation possessed by British.fire insurauce:'companies, and proved invaluable to ulany of them in enabling them -to come through the crisis' occasioned by the San Francisco disaster without 'seriously cutting down their distributions!