HIGHER BONUS SCALE

Otago Daily Times, Issue 26442, 22 April 1947, Page 9

HIGHER BONUS SCALE

GREAT INCREASE IN NEW BUSINESS The Seventy-seventh Annual Meeting of the National Mutual Life Association of Australasia, Liniited, was held at the Association’s Head Office, Melbourne, on April 1. « • Sir Harold Luxton, Chairman, said:' I have pleasure in presenting to you the Annual Report and Accounts for the year which ended on September 30, 1946, and the Report by the Actuary on the results of the Triennial Investigations made as at that date. New Business at its Highest.—The outstanding feature of the year has been , the extraordinary increase m the amount of new life assurances written. Our over-all production rose from £13,000,000 to the relatively high total of over £20,000.000 in sums assured. Many reasons have been asscribed for the remarkable increasesuch as, the necessity for further protection to offset monetary depreciation, the accumulation of new assurances deferred because of war service, superannuation benefits required for men on service returning to industry, completion of other schemes delayed until peace came, the weight of money seeking investment, and so on. However, after making full allowance for special influences, our experience has been that there is a widespread demand for more Life Assurance protection. The Revenue Account and Balance Sheet.—Our total net income, derived principally from premium payments and investment income, rose by £677,000 to £7,886,077. Interest earnings were, well maintained, the net rate earned on the Assurance Fund at £3 14s 2d per cent, (after deduction of rates and taxes) being only one shilling per cent, less than that for the previous year. This is a very satisfactory result. Payments to policy-holders 'or their representatives exceeded £4,000,000. War claims continue to come in and for the year amounted to £196,000. The financial year under consideration is our Investigation year, when all our assets receive special scrutiny and consideration. You will notice that we have applied a s,um of £50,000 in further reduction of the book value of the Association’s premises and £46,654 to eliminate the Furniture and Fittings Account—an unproductive asset —from the Balance Sheet. After making these provisions we closed the year with an Assurance Fund of £61,400,302, and the Balance Sheet shows how this fund, which is your security, is employed. There is no dead wood, which is a happy position in these disturbed times. The Actuary’s Report.—The results of the Investigations are set out in the Actuary’s Report, whiph has been adopted by the Board. The total sums assured (including Bonus additions) in force at the date of Valuation amounted to £171,487,619. The policy reserves held in respect of all this business were placed on a 2J per cent, interest : basis, with mortality according to the rates .of the Institute and Faculty of Actuaries’ Assured Lives Table (A 1924-29). The total surplus for the valuation period, 3 years on the bases indicated, was found to be £3,608,830, leaving, after deduction of the cost of the bonuses allotted to September 30, 1944, and September 30, 1945, an available net surplus of £1,838,654. In view of the uncertainty of the economic and financial outlook and the absence of any definite evidence ■ that the continual reductions of interest rates have reached their limit our Actuary recommended that £500,000 of the surplus now disclosed be retained to provide additional security for the Association’s contracts. Your Directors have decided to accept this recommendation and to apply the balance of surplus as follows:

£1,100,000 to provide bonus additions to members’ policies upon an improved scale. £138,654 as an addition to the Investment, Contingencies, and Exchange Reserve.

£50,000 to Income Tax Reserve. £50,000 to the Staff Superannuation Trust Fund.

In determining the basis of valuation and in making these allocations the Directors and Management have followed the advice of our founder, tendered to members at the first Investigation Meeting of our Association, when he said,. “The.main object of an Investigation is to ascertain that sufficient funds are invested to meet future claims, and to this the members ought to give earnest heed; their motto should be—‘FIRST—ADEQUATE RESERVE FUNDS; THEN—A FAIR . AND EQUITABLE DIVISION OF THE SURPLUS.’” The results of the Investigation are very gratifying. We, the policy-hold-ers, see only, the results, but your Directors are well aware of the heavy load carried and difficulties surmounted by our executive officers and staffs during those past three years. It is fitting that the high quality of service given by our staffs and' the spirit of co-operation and comradeship which animates them, should be made known and acknowledged.— P.B.A.