THE A.M.P. SOCIETY

Southland Times, Issue 16844, 21 September 1911, Page 2

THE A. M.P. SOCIETY

VISIT or MB GEORGE KINO, T.I.A. At the invitation of tlie board of the A.M.P. Society, Mr George King, I-’. IwA., tlit* eminent Actuary, of London. paid a visit to Sydney in order to report on the business of the Society, and. after spending the past two months over ids investigations, lie has now left on bis return Journey per the s.s. Makura. Mr King's final report will not be in the bands of the directors for some lime yet. but meanwhile lie has fin ni-lied a progress report to the Hoard. .Mr King writes :---!?>• a letter from the general manager of 1 ith January last I bail the honour of being- invited to visit Sydney to examine into the affairs of the A.M.P. Society. The instructions given me were of the briefest, and left me an absolutely free baud. The letter merely said on this point : i (a ' i a,, in view the present magnitude, Hm rapid growth of, and the extent to v. hich the ei• ir,cm; of the Comn!■ • 11 • v i all ii are ia ;. r<-sted in. this Sorictv, liir- Gourd is anxioim to obtain an independent opinion regarding its financial position and Us business method-. To this urt it has in-U meted me to invite you to pay a visit lo this city, and to conduct a per-omit investigation into the condition ami standing of the Society." Tim fami it ics afforded mo here have cot responded entirely tvftit the wide scope of (lie lave-ligation entrusted 'o me, and 1 have to thank all connected with tim Society for the freedom will l which they have plaeed every iiifonnatior. at my dispo-al. and for the cordial way in which they have assisted me. I have gone carefully into (lie affairs of the So'-iety, and have colleeled the material < ii which to base my (Inal report. which will he pi-mared on my return to l.ondon. and o-nt out with the least possible delay. Meantime I lie:; leave to convey to you in a general way the conclusions arrived at. The method pursued in the various departments of the bu-dness have been examined, and I find Hint the system is excellent, and so planned .as to involve only a minimum amount of work. I have paid more particular attention to the valuation methods, and find that the work is carried out with the greatest precision, and with cheeks so efficient dial no error of any i-miso|iioici' could escape discovery. The actuarial formnlnn ned in tho valuation of the various kinds of policies have been examined, and 1 agree with tVicm all ; and I have checked their application to individual cases and everything lias

boon found to be accurate. A.s a test of the penera 1 accuracy of the valuation. 1 have also revalued by an approximate summary process the ordinary whole-life business, which constitutes almost exactly one-half of the total liability of the Society, and the result was an estimate of liability of £1 ". I> oS.ft 7 r.. while the liability disclosed by the official valuation was f I ",iil 7.303. The complete accuracy of the official valuation is thus absolutely confirmed.

The examination into the valuation methods of the Society may lead me to make a few suggestions with a view to further curtailing the work, and these will he dealt with in my more detailed report later on.

More particularly in the method of distribution of surplus thdre is a vast amount of labour involved, which is costly, and which causes delay in the declaration of the annual bonus. I arn in hopes that a method may he devised by which n great deal of this may he avoided, while at the same time the relative amounts of bonus assigned to the various policies will not be materially altered, even when the method Is first applied. If this can be carried out, then, after the first application of the new method everything would work with great facility and very smoothly, and produce bonuses very like those which at present give so much satisfaction to the policyholders. The bonuses distributed by the Society are very large, and they are fully earned. My investigation also shows that as between policyholders of the different classes they are distributed in an equitable way. But a possible prospective fall In the rate of interest realised has to be faced, and the valuation basks Is therefore being gradually changed from 3Vz per cent, to 3 per cent. This is a wise proceeding, and it will be well to hasten the final result as far as that can be done without materially affecting the rate of bonus.

I have but little personal experience of Investments In Australasia, and it would be presumption on my part to express any opinion upon them. I may, however, be permitted to say that the system by which the investments are made, and continually supervised, by the directors at the Head Office and branches,’ Is admirable, and calculated to maintain the maximum of security, and I feel sure that the members of the Society may have absolute confidence that their immense funds are well administered and so Invested as to yield safely the utmost return In Interest that economic circumstances permit.