MOTOR UNION

Southland Times, Issue 22131, 27 September 1933, Page 13

MOTOR UNION

SOUTH ISLAND BODY. MUTUAL INSURANCE ASSOCIATION. The seventh anhual report and bal-ance-sheet of the South Island Motor Union Mutual Insurance Association for the year ended June 30 is as follows:— Premium Income.—The premium income less returns, refunds and reinsurances amounted to £30,401 3/10 as against £30,106 10/3 last year. The manner in which premium income has been maintained must be considered eminently satisfactory in view of the general depression, and really represents a greater increase of business than is shown by the figures when it is remembered that our premium rates were considerably reduced at the commencement of the year under review. Loss Ratio.—Net losses for the year amounted to £10,977 7/11 as against £11,161 4/4 last year, and £13,053 8/11 the previous year. It is gratifying to note that our loss ratio this year is 36.1 per cent, against 37.07 per cent last year, and 44.1 per cent for the year ended June 30, 1931. Surplus.—The net result of the year’s operations, after making provision for an adequate reserve for unexpired risks, reserve for investment fluctuation and contingencies, and all other liabilities, shows a surplus of £12,199 16/1, which has been added to general reserve.

Expense Ratio.—lt is with considerable satisfaction that we are able to report that notwithstanding a reduction in premium rates our expense ratio remains at the very low figure of 20.8 per cent, of net premium income. It is probably safe to say that our expense ratio is considerably lower than that of any similar organization in the Dominion.

Total Funds and Reserves.—The total funds of the association now amount to £74,034 10/1 of which amount £17,313,12/8 has been placed to reserve for unexpired risks, £4710 15/10 has been set aside as a reserve for fluctuation of investments and contingencies, and after allowing for all other liabilities in connection with unpaid claims, commissions, income tax, reinsurances etc, there remains a balance of £45,233 3/5, which has been placed to general reserve. It will be noticed that though our present income shows only a slight increase, the amount placed to reserve for unexpired risks has been increased by £2324 16/9. Your board of directors have considered it prudent to make this extra provision in view of the reduced rate of premiums paid by members.

Advantages of Mutual Insurance.— We would like to take this opportunity of again bringing under your notice that the association is a mutual one, and that the surplus funds belong to the policy holders and are applied to their advantage. The association was brought into existence a few years ago with the sole object of providing for members of motor associations and clubs an insurance cover giving greater benefits at lower premium rates commensurate with safety, and when it is realized that during the seven years we have been in operation, premium rates have been reduced 47J per cent., policy benefits have been greatly extended, and two bonuses have been paid to policyholders, it will be seen that our aims have been achieved to a much greater extent than was anticipated by our most optimistic supporters. A careful scrutiny of our balance-sheet will also reveal that policy-holders’ interests in regard to security have not been over-

looked, and that not withstanding the big reduction in premium rates ample funds have been accumulated to meet all possible requirements—the total invested funds now amounting to £70,000.