FINANCIAL LOSSES

Taranaki Daily News, 24 September 1938, Page 9

FINANCIAL LOSSES

By Telegraph—Press Association.

INSURANCE ACTIVITIES public mutual company

summary of position

Auckland, Last Night. The decision to go into voluntary liquidation was made to-day at an extraordinary general meeting of members of the Public Mutual Insurance Company of New Zealand and, in accordance with notice of motion, Mr. J. W. Hyland, public accountant, Auckland, who previously had been appointed receiver on behalf of debenture holders, was appointed liquidator. Information was given that for the 14 months ended August 31 last the loss was £34,614. Dr. A. T. Begg presided. In a statement of the affairs of the company Dr. Begg gave a summary of the financial position. dealing particularlv with the 14 months ended on August 31. In the underwriting" account commissions and other expenses were shown at £23.496 and the fire, marine and accident loss at £52,001. Income from premiums was £39.302. -The difference between the reserve for unexpired premiums was £2410 and the underwriting loss £33.786. The profit and loss account showed a nett loss of £34,614. The balance-sheet showed liabilities of £59.808. represented by debentures £23,700, sundry creditors £25,608 and reserve for unexpired risks £10,500. On the assets side was cash in hand £91. cash on deposit £10,000. motorcars £1670, furniture £937, agency balances and sundry debtors £6566, and the nett item ron estaiblishment account, including the 14 months loss previously mentioned, . of £40,543. Very Heavy Claims. Dr. Begg expressed the opinion that the figures quoted made it obvious that the company's position was due to the very heavy claims experxenced . during the peri'od under review. Losses under third party motor-vehicle insurance had been very heavy and operations in this business had actually ceased on April 8, 1938. Fire business had also been tinsatisfactory for the period, due to the number of claims received below or within the company's retention basis. "When it was decided it would be necessary to supplant the premium income from that source with working capital reorganisation was also effected, a decision being • made to dispose of the South Island business, which showed a loss of about £1500 a year. It was now realised it would have been wiser not to have entered into the third party business and to have utilised, the original debenture issue in the establishment of other business. For this reason it was decided t.o make a' new debenture issue of £300,000 at 61 pci cent.. instead of the original £12,000 at 8 per cent. A total of £9800 of the previous issue was converted to the recent issue and underwriting arrangements were secured for the balance of the £300,000 debenture issue decided upon. The directors then felt the company was placed in a satisfactory position.. Unfortunately, however, the aggregate of claims over the past few months had been very heavy and these placed thc company in a position where . the directors did not consider it wise to carry on. Mr. Hyland had agreed to ect in the dual capacity of receiver for the debenture holders and liquidator for a maximum fee of £2000. After the question of app inting two directors was discussed the neeting appointed Mr. Hyland as liquidator and agreed that the company should go into liquidation, the decisions being unanimous.