COMPANY PROGRESS.

Otago Witness, Issue 3899, 4 December 1928, Page 9

COMPANY PROGRESS.

THE AUSTRALASIAN TEMPERANCE AND GENERAL MUTUAL LIFE ASSURANCE SOCIETY, LTD.

The revenue of £3,312,151 for the past year exceeds that of its predecessor by £288.473. and is more than double that of six years ago. The new business of 1927-28, obtained entirely in Australia and New Zealand, furnishes an illustration of the development of life assurance in those countries. The progress, however, made by the society during the past six years had been one of increasing momentum annually •up to September, 1927, but the last 12 months show a reduction in the additional revenue acquired. As it is a mutual company, thv policy holders are also the proprietors, and, after the customary stringent actuarial valuation, they have the sat sfaction of learning that there is a surplus of funds of £463,930, of which it is recommended to distribute £443,369 as reversionary bonuses. A year ago the corresponding fi 'res were £401,666 and £383.242.

As the revenue increases the expenses tend to become proportionally lower. For last year thej’ were reduced to 24.50 per cent., in spite of the larger income incurring larger taxation. Expenditure directly attributable to the acquis : tion of new business has risen by nearly £5OOO, which, in view of the smallei increase in the premium income, represents a higher cost_ per pound to obtain. As a source of inedme, interest and rents have risen over £84,000. A relatively small proportion of expenditure being chargeable to them, the growth of them has much to do with k ping down the relation of total ’ expenditure to total income. Since 1921 the payments to policyholders have compared with premium income as follows,

1927-28 2,628,570 1,050,772 39.98 Although the ratio of payments is steadily mounting ..p, the margin between income and claims is gradually growing larger. It would seem that while the greater volume of business involves greater claims, the nature of the individual risks is apt to deteriorate, this stressing the necessit” of maintainin a steady flow of new policies annually.

Claims outstanding when the _ooks closed came to the moderate sum of £32.644. This aggregate w'.l var. according to the amounts represented by each policy as the settlement of large claims probably occupies no more time th n those ,of smaller amounts, and the above liability may cover few policies. In any case, it is evidence of prompt settlement. Deposits at £551,588 have almost doubled. It is not clear what accounts for the proportionally large extension of thi. part of the business, or wi.at the special purpose is for which such deposits are reserved. Sundry creditors are reduced to £10,370, the special indebtedness brought about by the purchase of freehold property ha- 'ng disappeared. . The fostering of che fidelity and contingent fund, now grown to £lO5, .00, continues.

Contemporaneous with the completion of the new offices at Melbourne and Wellington, the fixed assets have risen to £1,235,279. It might have been expected that, ith an increase of over £300,000 in one year, the. liquid investments would have'been considerably encroached upon, but they seem little affected. In the interest return, the average rate of £5 1' per cent, presumably includes rent received from the fixed assets, both in respect of premises occupied and let. As the majority of the buildings seem comparatively new, and occupy commanding positions that are more likely to appreciate than depreciate in value, ft may well be that, if a depreciation allowance has been made, it goes to swell a concealed reserve. Among the liquid investments, it is municipal and public body securities, rather than those of Government, that are most favoured. .It is noticeable that alth< ugh the society is strongly represented in New Zealand, no m- nej’ appears in the balance sheet as employed rith the New Zealand Government. Commonwealth and State Governments absorb £822,175, while £8,755.748 is in the hands of municipal and public bodies. There is no mention of an investment fluctuation fund to meet the rises and falls in the market prices of such a large aggregate, in which, however, the law of average may have ample scope to operate. Loans on mortgage, representing £1.572,012, continue to mount up, while loans on policies (£715.475) expand with an expanding business. The three chief revenue-pro-ducing assets have stood at the last four balancing dates as follows, viz:—

1924-25 1925-26 £ £ Government and municipal securities 7,0-18,113 8,262,381 Loans 900,065 1,004,583 Freehold properties ... 778.293 848,794 £8,726,471 £10,115,758 1926-27 1927-28 £ £ Government and municipal securities 8,814,970 9,577,923 Loans 1,713,845 2,353,273 Freehold properties ... 901,325 1,235,279 £11,430,140 £13,166,475

An average return of £5 14e per cent, over alb seems very satisfactory, and one that is scarcely likely to be greatly improved upon without sacrificing some degree of security. Cash in bank, partly on deposit, is the only asset that is much reduced. Standing at £12,262, or little more than onethird of its figure of 12 months ago, it is probably liable to considerable fluctuation, and its balance sheet position is merely momentary. Interest due and accrued makes up the appreciable total of £164.658, and premiums due account for £25,684. In neither case is there mention of interest or premiums overdue. The funds have reached the formidable aggregate of £12,717,601, having increased from £4,643,746 in the past seven years. The society is about to hold its fiftysecond ordinary annual meeting. The fact that progress has been so greatly accelerated in recent years raises speculation regarding the possibilities of the near future.

Sep. 30 Assurance Funds. Revenue. Expenses. 1921 £ 4,643,746 — 1922 5,488,629 £1,642,681 £462,212 1923 6,443,825 1,889,028 516,579 1924 7,516,749 2,144,139 585,606 1925 8,670,401 2,415,198 633,438 1936 9,902,987 2,701,156 690,045 1927 11,267,706 3,023.678 773,056 1928 12,717,601 3,312,151 811,484

viz.:— Premium Payments to Ratio Income. Policy holders. p.c. 1921-22 £1,371,640 £ 335,585 24.47 1922-23 1,569.344 417,253 26.60 1923-24 1,767,367 485.610 27.48 1924-25 1,970,051 628,107 31.88 1925-26 2,185.318 778.525 35.63 1926-27 2,424,283 835,904 36.54