NATIONAL MUTUAL LIFE ASSOCIATION.

Waikato Times, Volume 97, Issue 15211, 12 April 1923, Page 2

NATIONAL MUTUAL LIFE ASSOCIATION.

SEVENTEENTH ACTUARIAL INVESTIGATION. An extraordinary general meeting of policy holders in the National Mntual Life Association of Australasia, Ltd., was held at Melbourne on March 21, for the purpose of receiving- the report by the actuary on the seventeenth investigation. The report covered the three years' period to September 30 last. The chairman, Mr A. Newell, in presenting the report to policy holders, said:—"The chairman of these meetings has always had a pleasant duty to perform in presenting the report of the association's business. Almost invariably it has been a record of progress and development; sometimes the rate of progress has been checked by conditions which were beyond our control, but we have never gone back. The report which I will presently ask you to adept shows that during the last three years we have surpassed all past records. At our annual meeting we have had particulars of each year's transactions, but the significance and result of those transactions could not be known accurately until the value of tt»e association's obligations under the policies that have been issued was ascertained. We have now before us the results of the valuation as at September 30 last, and a summary of the whole of the ' business since the valuation which was made at September 30, 1919. With your permission, I will comment briefly on the principal items m the report. Our income during the three years amounted to £7,582,768, of which £5,289,523 was for premiums on poli- 1 cies, and £2,293,245 was for interest and fees. The total was £1,774,487 greater than the income of the previous period. The interest is equal to a return of £5 5s 7d per cent per annum of our total funds during the period, and this rate, calculated on the amount of the assurance fund at September 30, 1922, represents an annual income of more than £295,000 in excess of the amount which it was assumed in the valuation the funds will yield. The amount of interest received, you will notice, is nearly twice as much as the amount that was required to pay claims under policies. The payments to members under their policies amounted to £2,713,643, or £73,118 less than the amount paid from 1916-19, and the amount added to the assurance fund was £4,063,290, which is £1,666,494 m6re than,- the corresponding item shown in the 1919 report. The income of the three years is equal to the total incOme of the association during the first 28 years of its history, and the amount added to the fund is equal to the accumulations of the first 35 years. The new policies issued during the period amounted to £17,012,338. This is £3,550,000 more than we have issued in any similar period. The amount spent in obtaining this business represents more than half of the total expenses. This is owing to the method which is generally adopted of paying the whole cost of new business during the first year of a policy. It has often been asked how much new business can a life office transact with advantage to its members. No definite answer can be given to this question, but it is certain that a proportion of new business carefully selected and obtained at a reasonable cost is to maintaining the healthy condition of an office.

Mortality Experience.

"There is a reference in the actuary's report to the mortality experience of the three years to which I would call your special attention. After five years of war and pestilence we have "had three years free from any disturbing influence, and the result is shown in the amount of claims on our Consolidated Revenue account. From an amount that was uncomfortably close to the expectation in 1919 we have dropped to an amount that is 35 per cent below, so that with a much larger amount at risk the claims are £429,585 less than they were three years ago. "The law of mortality works very surely, and although we have fluctuations from year to year, and under exceptional conditions, as we have seen, the fluctuations may be serious, in the long run the law will prevail. We, therefore, cannot hope for a continuance of the remarkably favourable experience of the last three years. The result of our operations is given in a condensed form on page fifteen of the report. The valuation balance sheet shows that while the assurance fund at September 30, 1922, 'amounted to £16,587,659, the net value of the liabilities at that date was £14,882,160, so that there was a surplus of £l,705,498. This may be stated in another way. During the three years the assurance fund has been increased by £4,063,290, and the liability has, during the same period, increased by £2,357,791- The actuary recommends that £250,000 of this surplus should be reserved for what is called, for want of a better form, 'suspended mortality.' The reason for this is obvious "from what I have said about our recent experience, and the directors had no hesitation in adopting the recommendation. The amount to be divided amongst the policy holders—£1 455,498 —is £006,011, more than the amount, that was divided throe years ago, and, it is sufficient to provide reversionary bonus or additions to the sums assured under policies of over £2,500,000. "We cannot claim that this very satisfactory position is the result of the last three years' work. We arc reaping the result of the conservative policy that has been followed in the management of the affairs of the association for many years. "A perusal of the report and schedules will enable members to appreciate the matters that I have touched very lightly; any elaboration of them on this 'occasion, would bo out. of place. But there is a significant fact disclosed by the information on pape nineteen. You will see that the total of the premiums received on policies that are now in force is loss than the amount of the assurance fund; in other words, we have now in hand more than the total premiums that, have been paid by the present policy holders. Since the association was established we have paid to policyholders £14.999,335. Purchase of Equitable Life Assurance Society of the United States. "This is the first opportunity of informing the members direct of the completion of an important transaction by association. Since, our last annual meeting we have arranged to i-.'insure tin' who!- of the Australasian business of the Equitable Lite Assurance Society ol' the United'states. Announcements have appeared in the I press which contain all the important j facts, and 1 can only add that the ! transaction is a satisfactory one for ! the members of Hie association. ■ The bonus eorlilieatos showing the j reversionary bonus additions lo their ! policies will be issuer) to members on ; Thursday next week. Bonuses to bo Allotted Annually in Future. ■ Hitherto { h. association l'- i i > j^ u ea