COMPANY PROGRESS

Otago Witness, Issue 4039, 11 August 1931, Page 65

COMPANY PROGRESS

NEW ZEALAND INSURANCE COMPANY. LTD. I’aid-up Net May 31. Capital. Reserves. Profit. Dividend.

* Approximately. The past year is the first during which the subscribed capital has appeared as fully’ paid, but the net profit has not kept step with the increased amount. The distribution to shareholders nevertheless continues to rise, an additional penny per share being recorded on this occasion. The net return, which is equivalent to 12.79 per cent., is divided between shareholders and reserves in the proportions approximately of four-fifths and one-fifth respectively. Owing to the larger naidup capital, while the return per share is the highest recorded, the rate of dividend is reduced to its lowest figure for several years. A shrinkage of some £54,000 has taken place in the net premium income. The revenue from interest and rents has done little to make up for the shortage, while losses show a small increase. The position of losses in consequence stands less favourably to income than for any year since 192 J-22 as is shown below: —

One feature of the past season’s results is the small rise in losses compared with previous years. Another point is that the revenue from interest and rents, after having steadily grown annually since 1922, has received a decided check. Reserves have been depleted to bring the capital up to its fully-paid figure. The transfer of the £300,000 required has resulted in a large encroachment upon the general fund which now stands at £350,000. An interval of three years, instead of two. had taken place since the previous transfer, but the amount of the transfer was doubled. The addition of £95,000 to the investment fluctuation and contingency account has been made up of £41,869 from the net surplus, £28,131 from the floating balance, and £25.000 from the unexpired risk reserve. The effect has been to reduce the unexpired risk reserve to £575.000. and the floating balance to £105,943, while investment fluctuation account has risen to £120,000 after, apparently, some claim has been made upon it during the year. The necessity of strengthening the investment reserve at the present time has evidently been regarded as important when it has been raised nearly threefold. The taxation provision remains at £20,000. Unascertained losses are entered at £209.746, a slight increase on those outstanding at May, 1930, which may be accounted for by the larger amount to deal with. The estimate is not far short of 30 per cent, of the total for the year, and is possibly subject to some adjustment before final settlement. Sundry creditors and unearned premiums form the other liability. At £170,226 they have increased some £17,000, a movement which, in view of the smaller premium income, may be traced to sundry creditors. Among the assets no allowance appears for premiums due or overdue. Outside investments and accrued interest and rents, the assets are comprised of branch and agency balances (£190,359) and cash (£122,844) Collectively- they represent a large sum which, however, when distributed over the offices in different parts of the globe, may not come to anything great in each individual case. At the present time, exchange fluctuations must introduce more complications into the valuation. The slight decrease in accrued interest and rents to £45,719, from its figure of a year ago, is a sign of the times, since the invested funds have grown larger in the interval. Out of an aggregate of £2,766,993, investments placed in Government and municipal securities at £2.051,971 come first. This group, which has increased by approximately £70,000, is well spread over the globe, but is either employed within the Empire or in countries where the company is doing business. The bulk is held in Great Britain, New Zealand, and Australia, and from the order of designation, it may be inferred that Great Britain holds the most. Possibly it is not so - much against that group as against shares which have risen to £158,658 that the investment fluctuation and contingency account has been strengthened. Mortgages at £62,000 have altered little, but the rise of fixed deposits to £77.215 may be an indication of the prevailing uncertainty of the investment market. The fixed assets group ' has further fallen to £417.149, a result which may be due to provision for depreciation. Other properties besides the office premises are concerned, and doubtless contribute substantially to the revenue. Based on the money invested at the close of the financial year, the return comes out at just over 5 per cent. The balance sheet of the trustee branch, as far as a statement of the funds administered is concerned, is annexed to the other. How- far this section directly assists the insurance business is not disclosed, no record being published of its trading activities. Seeing that the revenue in the larger business is divided between insurance premiums on the one hand, and interest and rents on the other, it is not quite clear where the revenue from the trustee branch comes in. The total funds controlled in that section aggregate £5,976,370, or an increase of ; nearly £200,000. Investments on behalf of estates, trusts, and clients come to

£8,161,966, of which mortgages, at £951,774 comprise the largest part, but the balance is not unequally distributed over debentures, shares, and sundry property-. Sundry clients and trust accounts with cash at bank cover £99,765, while securities held as trustees for debenture-holders represent £2,714,640. The management of funds that are not far short of double the total assets of the insurance section must involve a considerable expenditure which has to be placed against the relative revenue, and the result might be as interesting in its way as that of -the parent body.

£ £ £ p.c. per share. 1921 .. 750,000 1,179.010 260.625 13% 1/4 1922 .. 750,000 1,111.602 54.431 13% 1/4 1923 .. 750.000 1,187.312 162,101 14 1-6 1/5 1924 .. 900,000 1,111.070 173,310 12% 1/6 1925 .. 900,000 1,235.651 238,374 13 7-36 1/7 192G .. 1,050,000 1,159,267 193,898 11 19-21 1/8 1927 .. 1,050,000 1,272.188 243,511 12% 1/9 1928 . . 1,200,000 1,211,225 224,794 11 11-24 1-10 1929 .. 1,200,000 1,305.813 231.287 11 11-24 1-10 1930 .. 1,200.000 1,421,551 239,499 •12 1/11 1931 .. 1,500.000 1.170,943 191,869 10 2/-

Losses. £ Total Income. £ Ratio. p.c. Premium Income. £ Ratio. p.c. 1920-21 768,819 1.373,69,7 55.97 1.275.231 60.29 1921-22 756.469 1.181.653 64.02 1,087,616 69.55 1922-23 651.698 1,155.820 56.38 1,054,571 61.79 1923-24 608.214 1.130.497 53.80 1,026.045 59.27 1924-25 G03.650 1.184.357 50.97 1.072.761 56.27 1925-26 633.973 1.133.252 53.58 1.066,012 59.47 192G-27 664.684 1.246.783 53.31 1,121,425 59.27 1927-28 694.344 1.280.505 54.22 1,150.232 60.37 1928-29 724,190 1.318.051 54.94 1.183.974 61.17 1929-30 737,719 1,339.495 55.07 1.199.382 61.51 1930-31 740,245 1.285.553 57.58 1.145.257 64.64