A.M.P. SOCIETY

Te Awamutu Courier, Volume 54, Issue 3899, 10 May 1937, Page 7

A.M.P. SOCIETY

ANNUAL MEETING. • NEW ZEALAND DELEGATE’S SPEECH. The New Zealand Delegate, Sir William Hunt, at the annual meeting of the A.M.P. Society held in Sydney on the 7th Miay, 1937, gave the following address: l — gives me pleasure to be here to-day as the Delegate from the New Zealand Branch, to support the motion for the adoption of the Eightyeighth Annual Report, to, refer to Jthe satisfactory part played by the '’Branch in achieving the magnificent total of new business for the past year to which the Chairman has referred in his interesting address, and to deal also with other matters affecting the Society’s activities on the ether side of the Tasman. It so happened that I was a visiting delegate from New Zealand in 1935, and were it not for the fact that I am on my way to England on a business trip, the honour of representing the' Branch to - day would no doubt have fallen to one of my colleagues on the local board. In an age when record-breaking of one description or another seems to be a feature of dailv affairs, it is a gratifying and reassuring thought that such a beneficient object as Life Assurance —and in particular that as offered by the A.M.P. Society—should find a place on the scroll of events. So far as we in New Zealand are concerned, the past year closed with our Ordinary Department new business register showing the unprecedented total of over five and a half millions, which is an increase of /no less than one and a half millions ; over the previous year’s figures, and representing about £3 14s 8d per head of the total population of the Dominion. It has been well said that Life Assurance figures are a good barometer of the times, the figures rising 7 and falling in sympathy with eco-no--1 mic conditions, and our splendid New Business yield in many respects reflects the trade recovery which has taken place in the Dominion. Special attention has been paid to the conservation of existing business during the year, with the most encouraging results, and although our Society has the lowest percentage of preventable waste business of any office" in New Zealand, no effort is being spared to reduce this amount even further. From the standpoint of incidence of population, New Zealand is perhaps not so fortunately placed as Australia so far as the writing of Industrial Assurance is concerned. In Australia you have a very substantial portion of the population living in the Metropolitan areas and engaged largely in secondarv industries, which provide a fertile field for the writing of Industrial Assurance, whereas in New Zealand probably a larger proportion of the population is occupied in primary pursuits, resulting in a more scattered field of canvass. However it is nleasing to note that our Industrial New Business and net in- . crease figures were both well in excess of the previous record figures es- '' tablished during 1935. and are a happy augury for the further development of this side of the Society’s activities in the Dominion. The Society might well be regarded as a national institution in New Zealand, not only by reason of the fact that it holds on its books over 40 per cent, of the total life assurance in force in the Dominion, but also from the standpoint of its financial stake in the country. The New Zealand Branch assets (all of which are invested in the Dominion) have now reached the very substantial total approaching twenty million pounds, of which loan on mortgage investment,-: represents some three million, Government securities three and a half million, and loans to public bodies and municipalities approximately nine million. Our securities 'are in a sound position, and those of the farm accounts which have required a certain amount of “nursing” during the depression years are, in the majority of cases, now standing on their own feet. During the year our loan operations were characterised by an unusually large expansion in mortgage investments a sum of approximately one million pounds being advanced, on rural lands conservatively 'valued and providing unimpeachable security. Remarking on Dominion affairs generally, it will be of interest to note that about 94 per cent, of New Zealand’s exports are farm products —chiefly crossbred wool, dairy produce and meat, and it is safe to say that the underlying factor in ou • trade recovery has been the material improvement in prices received for our farm products during the year under review. Taking 1914 as a base and calling it 100, our farm produce export index for 1936 averaged 123 compared with 98 in 1935, 99 in 1934, and an average of 82 for the three years 1931/33. For the current year 1937, wool prices have been much higher than during the same period in 1936, and our other expert lines from par to rather better. The cutIcok for our expert prices fcr 1937 is therefore better than 1936, added to which our volume of exports has in recent years, been steadily increasing. Befca'e concluding my remarks there are two matters to which I should especially like to refer, namely, taxation and population. As regards the former, it is a matter for some particular regret that the Government thought fit during the year tc increase the taxation payable by life offices in New Zealand. At first glance, it may perhaps be considered that .life assurance offices, by viitue / of their large and rapidly accumulatJ ing funds, can well afford the demands ' made upon them for taxation. The all-important fact must not be overlocked, however, that these large funds are not “reserves” as in the sense cf ordinary trading concerns, built up from profits but rather do tl«|R’omprise the aggregate of many small interests of individual policyholders—the totals of the minimum amounts wwhich will, with future premiums and interest be sufficient to pay future claims when they arise. In ether words, these funds are capital sums, or savings, which must event ually be returned to the policyholders or their dependants. There are some 600,000 life assurance policies at present in force in New Zealand, and a large preportion of these policies a provision for dependent

wives and children, and as every additional expense incurred by the office must necessarily restrict its bonus-paying powers, the tax on insurance offices has not unjustly been referred to as “a tax on widows and orphans.” The bonuses paid to policyholders certainly often receive the designation of “profits,” but strictly speaking this is an incorrect use of the word, as they are in reality, excess contributions which are returned either in the form of cash or increased assurance. The payment of a Life Assurance bonus is analagous to the case of a buyer receiving 5s change out of a pound note which he has tendered for goods costing 15s. If a life assurance office knew in advance what rate of mortality it was going to experience, what rate cf interest it would secure on its investments, and what expenses would be incurred in the future, there would be smaller premiums chargeable and no surplus for any bonus payments. It may well be contended therefore, that far from being subject to increases in taxation, life offices should be accorded every possible reilef. Under the 600,000 policies I referred to earlier, there are in New Zealand assurances totalling nearly £120,000,000 which represent . an average policy of less than £2OO, and an average annual premium payment oif about £7. This demonstrates very forcibly the fallacy of the assumption that life offices are a combination of capitalists. 1 Turning to the wider subject of population, one might be forgiven for quoting an old Greek philosopher, who, speaking of the Athenians of his day, vrrote: —“We regard a man who takes no interest in public affairs not as a harmless, but as a useless character; a good citizen does not neglect his own household because he takes care of the State.” Although New Zealand has perhaps the lowest infant mortality in the world, the serious fact remains that the accelerative rate of population increase is slowly declining. It seems that the progressive fall in the birth-rate was aggravated by the depression, but tbe advent of mere prosperous times, notwithstanding the marked increase in the number; cf marriages, has failed to check the fall in the birthrate. I trust I have not exceeded my time, and in closing I would like to pay a tribute to, the untiring and loyal services rendered by the staff and outdoor representatives of the New Zealand Branch during the year that has passed. I have much pleasure in supporting the motion for the adoption of the Report.”