LECTUER ON LIFE ASSURANCE.

Colonist, Volume XVI, Issue 1632, 13 May 1873, Page 3

LECTUER ON LIFE ASSURANCE.

Mr. W. A. Thomson, travelling agent and lecturer for the Australian Mutual Provident Society, gave an entertaining and instructive lecture on life assurance ai the Masonic Hall, Kelson, last night, when W. Acton B. Adams, Esq., M.P.C., took the chair The Chairman, in an able speech advocated life assurance and especially the mutual principle, after which he introduced the lecturer. Mr. Thomson, on coming forward, said: Mr. Chairman, ladies and gentlemen—The lecture I shall have the pleasure of giving you this evening is upon life assurance. In doing so I shall endeavor to make popular and understandable much that has been lDcked in the libraries of the learned, and to rescue from a deluge of mathematical formulae or scientific mystification (totally incomprehensible to the majority of my hearers), gems from the great authors who have raised the science of life assurance to what it is, by explaining those principles which no longer need algebraical demonstration. If I succeed I shall consider I have lent service to the cause I have espoused —different in kind truly, but no less important for practical purposes—than if I had written one of the most learned treatises the world had ever welcomed, though failed to understand—(applause). By diagram illustrations I shall exhibit to you the progress of this co-operative Society, the " Australian Mutual Provideut," of its future prospects I want you to be the judges. I feel I am bound to approaoh the subject in a serious mood, for it is of such vital importance to the community. The happiness and welfare of society depends so greatly on its being generally realised and admitted, that life assurance is almost a religious obligation, incumbent on every rightminded and right-feeling man—(hear, hear). Of all the ingenious arrangements and plans invented by man in a state of civilisation, with a view to material protection, mutual benefit, or mutual improvement, not one has effected so much for the solid and lasting welfare of the entire community as the system termed life assurance. By it the effects resulting from the natural precariousness of life have been greatly mitigated, the painful dread of the future, common to all who live by their labor, has been removed; careful habits have been fostered and encouraged, and the natural affections nourished and enlarged. More than this, the ocoasion it gives for the mind to dwell, not in fear and trepidation, but calmly and meditatively, on the close of our career, has served in many cases as a stepping-Btone to a religious life and a ; m —(hear)- It is a benificent arrangement, designed to afford to the man of limited means an opportunity of making a provision for his family, such as without it would only be within the reach of the affluent. If it were universally availed of, there need be no more sorrowing children, stricken down by poverty and dependence. A short account of the early history of assurance will be sufficient. It was a practice of the Saxon Guild, and traces of it are recorded in 1435. The magistrates of Barcelona issued an ordiuance relating to marine assurance, whereby vessels lost at sea or taken by the enemy should be replaced. We also find that contracts of nautical interests on loan, on bottomry, on respondentia, were issued from very remote ages by the Greeks, the Romans, and other nations ; and that, eventually, it formed the traditionary groundwork upon which arose the superstructure of modern assurance. The first probabilities of human life were made by Ulpian in the first century, to provide for the execution of the Roman law oalled Lex Falcidia. We proceed on to the transition period, when one Thomas Simpson published some wonderful annuity I tables, showing rates at which- annuities could be granted. Huyghens published a wonderfully clever work showing the time after which an absent person may be reputed to be dead, and the policy to be paid ; for assuring to a young girl a dowry or innuity on the day of her marriage; the relative value of different testimonies ; and the comparative chance of guilt or innocence of an accused person. Shir. Thomson then explained the various diagrams exhibiting the application of the bonus additions, as applied in different ways, firstly, as an addition to< the sum assured, in which case the policy had more than doubled in twenty years ; secondly, where such bonus was used for the extinction of annual premiums it liquidated all payment in about twenty years; and. thirdly, the bonus could be taken in cash, at the jption of the member. Another diagram showed that if the assurer chose (from inability to psy his premiums, or otherwise) to take ft full or paid-up policy, one could bo obtained, foe w amount com-

mensurate to, and considerably larger than the amount of premiums paid into the Society, such policy could be payable at death, and participate in the bonus additions every five years. The leoturer stated that a polioy holder could borrow on his policy, and that this Society had lent over £80,000 on such security. This would be found very useful to those who might suffer from any financial difficulty or temporary embarrassment, or might be used as collateral security. Also, that ample time was allowed to pay the premiums, thirty days grace being given, and for a term of six months after s«ch grace the Directors had power to reinstate a lapsed policy without loss to the policy holder. The leversionary bonuses deolared by the Society amounted to £485,000, and plainly showed that, life assuranoe should be mutual. He advised all intending assurers to see that the compound interest accruing from their premiums paid, returned into their own pockets; it was their inalienable right, for De Morgan, one of the most distinguished contributors to the science of life contingencies, says :—" No one can possibly understand mutual life assuranoe who does not consider it a bank yielding interest on interest." The same author says " that it may safely ba said there is nothing in the commercial world whioh approaches even remotely, to the security of a well-established and prudently managed (mutual) life office." Mr. Thomson read the following extracts from the Insurance Record: —"The present position of the Australian Mutual Provident Society, with its clear- ' ness of accounts, vigor of management, and economy in expenditure, seems to us to be most creditable to all who have been concerned in bringing it to its present prosperous state." The Commercial World, also a life assurance journal, says : —"The clear and succinct manner in which the business and accounts are detailed, furnishes a capital model for all other offices to follow." Should the Society continue to progress as it promises to do, there is every reason to anticipate for it a prosperity rivalling that of the famous old Equitable Society of London, which paid to every policy-holder eight times the amount of his original assuranoe, after a duration of 60 years, Tbe accumulative funds of the Australian Mutual Provident Society were stated to be over one million sterling, and invested in such reliable securities that there was little or no danger of loss, and that last last year the interest on. these accumulated funds produced more than sufficient to pay out the deaths for that year. The revenue derived from the respective Colonies is proportionately represented in the statements of assets by investments in the local securities of each, and a guarantee fund of £50,000 bears favorable comparison with the guarantee funds formed by the leading Mutual Assurance Societies in Europe, and it must be with pride that the policyholders of this large co-operative Society learn that the exposition contained in the last quinquennial report, is believed to be more full and complete than was ever presented to the members of any Assurance Society. It fully and clearly makes known to actuaries and persons skilled in the finance of life assurance what is the condition of the Australian Mutual Provident Society, and what are the prospects of advantage to members in joining it. Only by the publication of such information can the real position of a life assurance institution be made known ; and the form in which it has been communicated to the members of this Society is in complete accordance with the forms and schedules prepared by a Committoe of actuaries, and passed by the Imperial Parliament—(cheers.) Mr. Thomson said the Anglo-Saxon race vas famed for longevity, and that the lives of men were more in their own keeping, and with a heavier responsibility than they were willing to admit. Those who have written or thought much on the subject have, for the most part, become wonderfully enamoured of their theme ; they agree, almost to a man, that it is in our own power not only to prolong our days, but also to increase our enjoyment of life. Other diagrams were then referred to, exhibiting the Lombardian system of investment, viz., where the Society lent money on mortgage it required interest and principal to be paid by equal payments over the term lent, the Sooiefy holding the full security until the last payment was made. The measurement of indebtedness was then exhibited, proving that if the reserve funds of the Society were religiously conserved at interest, and the mortality tables correct, no trial year existed, and that the bonus struck a oorreot balance each five years, when, if any member had paid more than was necessary, such sum was returned to him with any interest it might have earned in the interim. The surrender value of policies became a matter of serious importance to policy holders; at the age of 25 years, after three years, 55£ per cent, was (bonuses not being drawn); 10 years, 70 per cent.; 15 years, 96 per cent. ; 20 years, 146£ per cent. ; proving the advisability of adopting the mutual system. (Cheers.) Members, not being seafaring men, may, without vitiating their policies, on permission from the Society, travel to any part of tbe world outside the tropics (Asia excepted) ; for residence inside the tropics a small extra rate is charged ; seafaring men in steamers, free. The superannuation table J was fully commented on by the leoturer, and it showed that a sum of money could be received at the ages of 50, 55, or 60, and that should death happen prior, the amount with its accumulations was payable to the representatives of the assured. (Cheers.) The Society had done the largest business in the world during the last year, and it was the duty of every member to induce his friends and neighbor! to join, and so strengthen us all. The lecturer said that the annual report of April 24th shows:—New policies completed 29,286, assuring £1,003,000, and giving a revenue of £42,000. Claims, including bonuses, £51,000. The receipts exceeded the disbursements by £168,000. Accumulated, fund, £1,133,000. Gross annual revenue, £282,600. (Cheers.) The children's endowment was a very important department of this Society ; a sum of money could be secured for a child on attaining the ages of 14 or 21 years as an educational fund, to start a son in business, or provide a marriage portion for a daughter, and the small savings of the young people would teach them provident habits, never to be forgotten. (Loud applause.) In Mr. Thomson's concluding remarks, he stated that the Society had in hand upwards of 85J per cent, of the total premiums reserved on the existing policies, after paying all claims ; or the available balance, if every policy was puroha9ed by the Society at its full value, would be a sum of £200,000 Mr. Thomson stated that it was with great pleasure he informed the policy-holders present that there was every prospect of a very large bonus being declared in 1874,—(cheers) —and that the future bonuses should be large, as the compound interest on the guarantee fund of £50,0D0 will go to swell future profits—(hear, hear). The lecturer called the particular attention of his audience to the faob that the special Aot of incorporation exempts members from all personal liability. Mr. Thomson strongly advocated temperance, and exhibited a diagram that should induce everybody to adopt temperate habits. Much had been said with reference to the relative cost of assuring with the Government or this Society. Mr. Thomson referred his audionce to page 26 of the prospectus which showed that a person of 35, assuring his life for £1000, aud taking the bonus in cash, the policy with the Mutuil would have cost him during 20 years £227 11*. 4d., as compared to £465 he would have had to pay the Government during the same period —(applause). The lecturer was listened to with great attention throughout, and numerous amusing aneodotea brought the lecture to a close. The usual vote of thanks followed for Oharman and lecturer.