PROVIDENT INDUSTRIAL INSURANCE COMPANY.

Otago Witness, Issue 2429, 3 October 1900, Page 10

PROVIDENT INDUSTRIAL INSURANCE COMPANY.

The annual meeting of the Provident Industrial Insurance Company of New Zealand was held on Tuesday. Mr E. B. Cargill presided, and 5100 shares were represented.

The directors' report submitted contained the following clauses: —

" The premiums received during the yeai amount to £9369 17s lOd, being an increase of over 5.11 per cent, on the premium income for the previoas 12 months. The claims aggregate £2935 19s 2d, and include weekly allowances and medical charges under sickness policies. All claims were paid immediately on production of satisfactory proof of death and without any legal formalities. The numerous testimonials received prove that tho company's promptitude and liberality in settling claims continues to be duly appreciated. Four thousand eight hundred and twenty-eight new policies have been introduced during the year. The cost of collection amounted to £1576 17s 4d, or 16.83 per cent., against 18.29 last year. The expenses" of management amounted to £1153 lls lOd, or 12.31 per cent., as compared with 13.59 last year. The whole of the extension of business account for the current year has been written off, also the sum of £539 4s, being actuarial expenses, balance of expenses incurred in England re agents, and iSIOO off the extension account which appeared in last year's balance sheet. The funds at 30th June were £9007 19s "d, and the assurance fund now stands at £42-42 19s 9d, the latter showing an increase of 17.30 per ceiit."

The Chairman (Mr E. B. Cargill), in moving the adoption of the report and balance sheet, expressed his great satisfaction "with the accounts now presented. He could assure share--holders thaE the business of ilia company was in a very sound position indeed. They had passed over a i>eriocl, of difficulty, and arrived at a position when they might expect a steady onward growth. In the matter of premium income, a comparison with the great English j companies, when those companies were at a simllai age to tlie Provident- and Industrial, -would bs a surprise to shareholders. The Prudential, for example, at the end of its first 10 years, did not show as well as their company did. He would not, however, dwell on this point, as the general manager had prepared a statement showing how favourable was their position in this respect. Some attacks bad been made on the company in the past for carrying what were called paper assets- — that is to say, a. pioportion of the- amount expended for obtaining new business was not immediately written off the funds of the company, but appeared in the balance sheet as an asset. But, as the general manager would explain later on, this was the practice of nearly all industrial offices in their earlier years, and was sanctioned by the highest actuarial authority. One of the difficulties the company had to contend with was the sparse population of the colony; and this small population was distributed among a number of small towns, which made the work of doing business and collecting premiums much more arduous. In Australia it was veiy different, Melbourne and Sydney having each, a population of over 400,000 people to work upon. Our staff have, therefore, had to fight through many difficulties, and our present position did them great credit. It had been very hard to obtain good and suitable canvassers, and in order to properly push and extend the business- it might be necessary to get men fi cm Home or elsewhei'e. A complete valuation. o£ the company's assets and liabilities for the "quinquennial period- pnded 30th June, 1899, was made by Mr Percy Muter, Fellow of the Institute of Actuaries, London, and Jiis letters, copies of which are Jyiug on the table before you, speak for themselves. lit the earlier yoai'3 oi a company, when spending special sums in building up a premium income, huch expenditure must either be treated as an asset, in which case a- suiplus in the assurance fund would be shown. If written off, a. deficiency will icstili; in the assiiran.ee fund. Owing to the heavy initial expense in obtaining industrial lifrs business, a paid-up capital is indispensable. In sddilion to the surplus shown j?x fivu' pejaSfWiS* wkeu, couyjaii^a iUo

total fundf * and liabilities, we have a large subsciibpcl capital. The financial position of the corngany is, therefore, undoubted. The ch&irra&tr/'ftien referred at length to the figtires of -the. balance sheet, and- concluded by expressing ]£i's Eigh ?ense of the services rendered,^ by the general manager, who had not only been most "assiduous in his attention to the, affairs of the._ company, but had shown a grasp and knowledge of the business which was producing the most benefirial resultd. Mr A.J. Burns had very much pleasure in seconding the adoption of the report jxnd balance sheet. "When he remembered the troublous time 3 the company, in "its' earlier -years, had passed through — during the strike and at other tirnos, — he thought the position they had now attained a matter for great cojgratuiation. Referring-, to the balance sheet, the fact that, after writing off the whole of the>.year.'s extension account (£2238 5s 10d) and, £4ol 4s, special charges, ihe funds had increased by nearly £600, was a result he thought they had every reason to be pleased with. Tha motion for the adoption of the report \md'*balaiice. sheet was then put and carried xiEanioionsLy,, . The General Manager, at, the request of the chairman, -gave details of the business. In the first plac9 the premiums leceived, although, showin* a' very. satisfactory increase, have been cor. siderably" reduced owing to the fact that i» was deemed advisable to make some changes in the staff in i Australia and curtail the bxisiness at one^A'ilsti-'alian -agency, , some of which was found, on inspection, to be of an unsatisfactory nature. "The branches and agencies aro now in good forking order, and the management look forward to- a large increase in the premiums at the end "of the present year. Four thousand eight hundred and twenty-eight new policies were issued during the year, assuring the sum of £118,037 lls 2d, and producing a new annual income of £5507 18s 4d. A reference to the balance sheet will, shov/ ,a very satisfactory reduction in tho expenses of management and cost of collecting premiums. New business expenses show a little higher than the ornount anticipated for the year just entered upon, owing to the curtailment of business ' already referred to. From time to time some criticism has been directed against the system of an industrial company showing, during its earlier years, the cost of obtaining new business as an asset. To show how general is this practice, the general manager quoted tne figures of seven of the younger companies doing business in Great Britain, and one in Sydney, and compared them with those, of the Provident Industrial Company, pointing out that the latter comoared very favotirably with the companies mentioned. He was pleased to,, be able to say that the company had been able during the past year to add a satisfactory amount to the fuads after writing off the whole of the current year's special expenses for new business, also actuarial expenses, and they ,had now made a start to extinguish the old extension account, which will soon. : disappear. __ The General Manager, before, concluding,' said:" l should like to compare our position with that of one of the leading British companies. The British "Workman's Assurance Company, whifch was established in 1866.. now has a premium income oi^dES^G^ 14s 2d, and funds ,amounting to £448,857 ls/2d. The premiums received during 'first 10 years amounted to £60,716, or an average of £6071 12s per annum. They had in i hinds at the end of the first 10 years £4389, including paid-uu capital. The Provident and In- ! dustrial, established in 1889, had received in premiums during fust 10 years £57,933 2s sd, or an average of £5783 6s 3d per annum. The ifunds at end of the first 10 years stood at £8441 ISs 9d. We are therefore in a much better I position than the British "Workman's was. Our ! funds have now this year been increased to i over £9000, and in addition we have a sub- ! scribed capital of close on_ £15,000. „ The .Pru- ! dential Assurance Company of London, which had only received a very small amount of premiums during tho first 10 years- of their existence (their income for the eighth year amounting tc £3709), have now an income of between 1 eight and nine million "sterling per annum, and Ltheir paid-uo capftal.Hias 'been- increased out of the profits from the modest sum oi £5000 to £1,000,000, their total funds amounting to £35,000,000 sterling. You will therefore se.e what possibilities lie ahead of an industrial | office.- In conclusion, I must thank the superintendents and agents foe their efforts dining the past year. Some of our more successful men have been tempted by rival offices to leave our service, but "ISajn pleased 'to say all have remained loyal to this company. Mr A. J". Bums was reflected a director, and Messrs Baker Bros, re-elected auditors.

On the motion of Mr Ritchie a hearty vote of thanks was passed to the ' general manager for his services during the year, and Mr Kirkcaldy suitably replied. A vote of thanks to the chirnnan wns carried on the motion of Mr Bannister, and the proceedings then terminated.

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