NATIONAL MUTUAL LIFE ACCOUNTS

Otago Daily Times, Issue 25802, 24 March 1945, Page 2

NATIONAL MUTUAL LIFE ACCOUNTS

NEW BUSINESS INCREASES BONUSES UP 50% The seventy-fifth annual meeting of the National Mutual Life Association of Australasia, Limited, was held in Melbourne on February 27. Moving the adoption of the report and accounts, Sir Harold Luxton, chairman, said:— “ Before dealing with the ordinary business of the meeting, I wish to refer to the great loss sustained by the association by the death of Lieut.-Colonel the Rt. Hon. Lord Somers, K.C.M.G., D. 5.0., M.C., who was a member of our London board for over 11 years. We acknowledge gratefully the services iie rendered, often at great personal inconvenience, as a member of the London board. "We have recently suffered a further loss by the death of Sir James Grose, chairman of directors of our New Zealand branch for the past seven years. His passing has deprived the association of a wise counsellor and sincere friend. New Business " I am glad to say that the highly satisfactory results of the association continued to show further improvement during the past year. “At £10,740.546 in sums assured, our new business —exclusive of life insurances of a temporary insurance character, of which £1,851,230 was written in the previous year, is £1,743,663 in excess of the amount completed during 1943. “An increasing,number of private and public companies and authorities have selected the association to underwrite superannuation fund benefits for their employees, and a substantial proportion of our new business arises from this source. “ The arranging of such superannuation benefits through a leading mutual life office has important advantages. Not the least, in tire case of our association, is that over the long period of years during which we have engaged in providing benefits for such funds, our staff has acquired an expert knowledge of the various staff welfare, legal, and actuarial factors involved. we shall be pleased to place the services of our technical officers at the disposal of employers who may be interested in the arrangement of staff superannuation or provident funds. "It should be clearly understood that the association transacts only ordinary life assurance business; it is important to bear this in mind when comparing its figures with those of companies which transact both ordinary and industrial assurance business. Total Net Income “ The total net income rose by £322,160 to £6,884,448. Of this income, £4,822,073 came from premiums and annuity considerations and the balance of £2,062,375 from interest, rents, and fees. Interest Rate “ The rate of Interest earned on the assurance fund was £4 7s 7d per cent., and after deduction of rates and taxes chargeable against interest, the net rate was £3 16s lid per cent. ”By agreement life assurance offices in Australia and also overseas, in the early days of the war, undertook to support war loans to the full extent of the increase in their funds. We, however, have gone further, and in accordance with our declared policy of supporting the war effort to the maximum extent the association subscribed, during the past year to war nans in Australia, New Zealand. Great Britain, and South Africa £3,723,500, or £1,055,469 more than the increase in the assurance fund. Payments to Policyholders “Claims bv death rose only slightly by £14,395 to £1,605,852, although the amount at risk under policies current was £7,712,642 greater than the previous year, The amount of the actual claims experienced was. well within the amount expected according to the latest published tables of the mortality of assured lives. " War claims notified during the year included in the above figure amounted to £251,000 and were £44,000 less than the corresponding figure for 1943. "A further marked reduction in the number and amount of policies surrendered is a striking feature of the accounts and one which we are all glad to see. The amount paid for surrenders was the relatively nominal amount of £228,189, representing, as it does, only Id in the £ of the assurance fund. By way of contrast, the amount paid in 1942 was £492,260, while 10 years ago, when the assurance fund was over £18,000,000 less than it is to-day, the amount paid was £603,735. In all, the association paid to the policyholders or their representatives during the year £3,633,894, i.e., at the rate of £70,000 per week. “As a result of the year’s transactions, the sum of £2,668,031 was added to the assurance fund, which now amounts to £55,978,228.. Bonuses Increased “ You will no doubt recall my statement at the triennial investigation meeting last year that the association was in a strong position financially to meet whatever lay ahead. lam now able to say that because of the large increases whiph were made in the reserves held to secure the due performance of existing assurance and annuity contracts, the board considers it safe and reasonable, notwithstanding the difficulties of the investment position, to anticipate the results of the next triennial investigation due to be made as at September 30, 1946, by applying a portion of the surplus earned during the year to provide intermediate bonus additions to policies entitled to participation. You will be pleased to know that under the main whole-of-life and endowment assurance tables, which constitute over 90 per cent, of the total business of the association, these bonus additions are at rates approximately 50 per cent, in excess of the corresponding annual rates of bonus declared over the three-year period ended September 30. 1943. “After due consideration and in continuation of the association’s war-time policy of eliminating all non-essential work, bonus certificates will not be issued in respect of this distribution. Three-quarters of a Century

“ Seventy-five years ago a young man, known in later years as Colonel J. M. Templeton, C.M.G., F.1.A., decided to establish a mutual life association on original lines. He calculated the rates of premium, paid the first premium' hims'lf of £6 0s lOd, and set about the difficult business of obtaining members. The plan adopted was to get a guarantee for three years that if any claims arose beyond what the funds of the association could meet, the guarantee would be forthcoming to settle the claims. That guarantee was never called upon. Thus the ‘ National Mutual ’ came into being. “ In founding a mutual office. Colonel Templeton desired that every man should get the full value of what he paid. This led him to introduce the non-forfeiture principle of applying the surrender value of a policy to pay premiums in arrears, and he claimed that the establishment of the * National Mutual * inaugurated a new era of life assurance. Naturally enough, the principle was laughed at at first by existing companies, but to-dav it is universally recognised, and in England since the outbreak of the present war, by arrangement with the authoritites, it has been adopted as the basis for the protection of policies on the lives of the serving forces. “ From its very beginning, the association never looked back. Through depressions, epidemics, financial crises, and world wars, it continued its steady progress and extended its benefits to our kith and kin in New Zealand, Great Britain, South Africa, and other parts of the British Empire—until now, after 75 years of existence, it has become a great instrument of social security, comprising over 250,000 members—one friendly family looked after by happy and efficient staffs who take a personal pride in promoting its welfare. “ There have been paid to policyholders more than £76,000.000, and there are in force more than 140,000,000 of assurances in respect of which nearly £60,000,000 of funds are held in trust. These funds, as shown in the balance sheet, are lent to Governments for national purposes, to local bodies to provide social amenities, such as power, water, sewerage, etc., and to individuals for housing and other desirable purposes. It is an achievement of which we may well be proud. Staffs “Of our staffs in Australia and overseas, indoor and in the field, I cannot speak too highly. Our London staff most of all have suffered intensely from the ravagrs and strain of war. Members on service from Australia who have met and seen them at work all express their high admiration of the magnificent way in which they have carried on under conditions of difficulty and constant danger. To all our staffs, including those on service, we express our grateful thanks.” — 24.