ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1912.

Appendix to the Journals of the House of Representatives, 1913 Session I, H-08

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1913. NEW ZEALAND

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1912.

Presented to both Houses of the General Assembly pursuant to the Provisions of the Government Life Insurance. Act, 1908.

Government Insurance Office, Wellington, 19th May, 1913. I have the honour to submit the following report upon the transactions of the Department for the year ended 31st December, 1912, and its position at that date. The Revenue Account, Balancesheet, and Statement of Business are appended. New Business, and Amount in Force. —'During the year 4,771 proposals were dealt with for the assurance of £1,258,032, and the number of policies actually completed was 3,966, assuring £1,042,264, being the largest amount of insurance written in any one year since the inception of the Department, and showing an advance of no less than £170,310 on the new business of the previous year. The annual premiums on new policies amounted to £29,845. Twenty-eight annuities were also granted, on which the purchase-money was £14,298. The new business of the Department has shown a regular increase for many years, and the following statement for the past five years shows that the yearly increase has been rapidly progressive during that period :—

The total business now in force is 50,458/ policies (including 388 annuities), assuring £11,865,462, and £1,406,237 reversionary bonuses at death or maturity, the total business bearing an annual premium income of £356,054. Prom a limited number of adverse criticisms which occasionally appear it might be thought that the Department is unprogressive, but when it is understood that, unlike other Australasian life offices, its business is limited to the Dominion of New Zealand, with a population barely exceeding a million inhabitants —including the very young and the very old, who are practically outside the range of life assurance —it will be conceded that to have built up an existing business of over 50,000 policies assuring £12,000,000 sterling, and to be able to secure over £1,000,000 sterling new assurance in a single year, indicates an activity of which no institution in the world need be ashamed. Income. —The total income of the year was £590,314, made up as follows : Premium income,. £351,588; interest income, £224,422 ; annuity purchase-money, £14,298 ; fees, £6. In regard to the income from the two principal sources, premiums and interest, the comparative results for the past five years are given, together with the yearly rates of interest earned. It will be seen that the return upon the growing funds is substantial and has increased considerably during the period.

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Year. New Sums Increase on assured. previous Year. I j Policies in S ' ,mS F a^' e red f " (excluding Bonuses). 1908 1909 1910 1911 1912 £ 780,597 795,339 820,179 871,954 1,042,264 £ 14,742 24,840 51,775 170,310 47,033 48,016 48,932 49,376 50,458 £ 10,955,749 11,151,094 11,360,796 11,514,657 11,865,462

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Outgo. —During the year 444 policies became void by the deaths of policyholders, for claims amounting to £143,108, and this amount is considerably under what is provided for in the tables of mortality used by the Department. Five hundred and seventy-nine policies also matured for £151,950, this being the first time in the history of the office when the amount maturing as claims during the lifetime of policyholders has exceeded the amount paid at death. The large amount paid on these matured policies causes no strain whatever on the Department's resources, the demands in this respect being known beforehand and adequately provided for in advance. The event may be regarded as a satisfactory and very practical testimony to the vitality of our policyholders and the permanent nature of a form of policy—endowment assurance —which makes provision for old age as well as early death, and which clearly meets the requirements of the people. The surrenders and loans released by surrender have decreased from £57,981 in the previous year to £54,344 in 1912. Accumulated Funds. —The total assurance, annuity and endowment funds, apart from a special investment reserve of £113,663, now stand at £4,829,141. The following statement shows the progressive growth of the Department in this and other respects during the past thirty years : —■

The Balance-sheet. —On the 31st December, 1912, the total assets of the Department were £4,976,948, invested as shown in the following statement, which gives the distribution of the assets a year ago for purposes of comparison:—

The chief items of interest in the balance-sheet are the following:— (1.) The advance in mortgages on freehold property, which asset has been increased by £145,521, and now stands at £3,045,274. (2.) Cash in hand and on current account has decreased from £77,681 to £30,479, the difference being due to the closer investment of the available funds in mortgages and other interest-bearing securities, the opportunity for which has, of course, been considerably facilitated by prevailing financial conditions. (3.) The total investments show an increase of £166,120, and now amount to £4,832,747. The general progress of the Department has been well maintained, the new business having been much increased, an interim actuarial valuation showing an unusually large surplus at such an early stage in the triennium, and the position generally being eminently satisfactory. J. H. EICHABDSON, Government Insurance Commissioner.

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Year. Premium Income (excluding Interest Income. Total Income. Annuities). Accumulated Funds. Rate of Interest on Mean Funds 1908 1909 1910 1911 1912 £ 330,806 330,927 338,487 342,977 351,588 £ 193,870 201,327 206,552 215,530 224,422 £ 534,441 546,566 561,150 575,849 590,314 £ 4,264,685 4,405,141 4,554,730 4,699,970 4,829,141 £ s. d. 4 12 2 4 12 11 4 12 3 4 13 0 4 14 2

Year. Policies in Force. Accumulated Funds. Total Income. Total Expenses (excluding Taxes). Ratio of Total Expenses (excluding Taxes) to Total Income. Number, Sum Assured and Bonuses. 882 897 912 15,892. 36,174 50,458 £ 5,273,164 9,857,010 13,271,699 £ 704,889 2,725,106 4,829,141 £ 180,447 398,121 590,314 £ 26,875 51,149 67,418 14'9 per cent. 12-8 „ 11-4 „

Amount. At 31st December, 1911. Percentage of Total Assets. Glass of Investment. At 31st December, 1912. Amount. , 11^ 6 , of Total Asset Percentage of Total Assets. £ 2,899,753 791,704 668,069 168,208 135,879 114,808 77,681 59-7 per cent 16-3 13-7 3-5 2-8 „ 24 „ 1-6 59-7 per cent. 16-3 13-7 3-5 2-8 „ 24 „ 1-6 Mortgages on freehold property Loans on policies Government securities Local bodies' debentures Landed and house property Miscellaneous assets Cash in hand and on current account £ 3,045,274 808,884 668,089 171,169 136,586 116,467 30,479 61 2 per cent. 16-3 13-4 3-4 2-8 2-3 0-6 „ Total j 4,856,102 100-0 per cent 100-0 per cent. 4,976,948 100-0 per cent.

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Revenue Account of the Government Life Insurance Department foe the Year ended 31st December, 1912. £ s. d. £ b. d. Amount of Funds at Ist January, 1912 4,699,969 11 9 Death claims under polioies, Assurance, Renewal premiums— Assurance, An- including bonus additions .. .. 143,108 5 0 nuity, and Endowment .. .. 322,793 10 4 Endowment Assurances matured, ivNew premiums (including instalments eluding bonus additions .. .. 149,483 14 0 of first year's premiums falling due Endowments matured .. •.. 2,465 18 0 in the year) .. .. .. 26,722 17 11 Premiums returned on endowments .. 49 19 2 Single premiums—Assurance and En- Bonuses surrendered for cash .. 11,883 6 7 dowment .. .. .. 2,072 0 7 Annuities .. .. .. .. 17,318 9 6 Consideration for Annuities .. .. 14,297 12 6 Surrenders .. .. .. 20,808 1 3 Interest .. .. .. .. 224,422 10 3 Loans released by surrender .. .. 33,536 1 3 Fees .. .. .. .. 510 11 Commission, new* .. £20,592 11 11 renewal 2,545 14 6 23,138 6 5 Land and income tax .. .. 15,070 17 9 Expenses of managementSalaries— Head Office ..£17,746 4 4 Branoh offioes and . agents .. .. 7,756 16 3 Extra clerical assistance 193 0 6 Medioal fees and expenses .. .. 5,062 14 11 Travelling-expenses .. 781 19 1 Advertising.. .. 1,047 5 9 Printing and stationery 1,766 16 8 Eent .. .. 2,822 6 6 Postage and telegrams 1,797 14 2 Exchange .. .. 59 18 6 Office-furniture depreciation .. .. 270 9 3 General expenses .. 2,309 14 4 Triennial expenses .. 2,181 7 4 Compensation for loss of office .. .. 483 3 0 r 44,279 10 7 Amount of Funds, 31st December, 1912 4,829,141 4 9 £5,290,283 14 3 £5,290,283 14 3 * Including Agents' allowances. Balance-sheet of the Government Life Insurance Department on 31st Decembeh, 1912. Liabilities. j Assets. £ s. d. I £ s. d. £ s. d. Total Assurance, Annuity, and En- Loans on policies .. .. 808,884 1 9 dowment Funds (as per Revenue Government securities — Aocount) .. .. .. 4,829,141 4 9 Consolidated stock .. 625,900 0 0 Claims admitted, proofs not yet com- Debentures issued pleted .. .. .. .. 29,513 17 5 under the District Annuities .. .. .. .. 336 0 6 j Railways PurchasCommission .. .. .. 318 15 2 i ng Act 1885 ExMedical fees .. .. .. 359 2 0 tension and AmendPremium and other deposits.. .. 3,138 13 6 ment Act, 1886 .. 40,000 0 0 Fire-insurance moneys in suspense .. 295 0 0, Debentures issued Sundry accounts owing .. .. 182 0 1 under the ImmiInvestment Fluctuation Reserve .. 113,663 6 1 gration and Public Works Act, 1870 2,189 6 10 668,08'J 6 10 Municipal Corporation debentures .. 126,518 14-8 Harbour Board debentures .. .. 38,700 0 0 Town Board debentures .. .. 5,950 0 0 Landed and house property .. .. 135,620 13 8 I Landed and house property (leasehold) 965 11 2 J Offioe furniture (Head Office and agenoies) .. .. .. 811 8 0 Mortgages on property .. .. 3,045,274 2 9 Properties acquired by foreclosure .. 1,933 111 Overdue premiums on policies in foroe .. £6,214 10 9 Outstanding premiums due but not overdue.. 36,705 5 11 42,919 16 8 Overdue interest .. £1,537 2 10 Outstanding interest due but not overdue.. 7,901 5 4 Interest aoorued but not due .. .. 58,919 6 8 . 68,357 14 10 Agents'balances .. .. .. 2,444 11 10 Cash in hand and on current account.. 30,478 15 5 £4,976,947 19 6 £4,976,947 19 6 Government Life Insurance Department, 4th April, 1913. J. H. Eichardson, Commissioner. W. B. Hudson, Audited and found correct. Secretary. Robert J. Collins, Controller and Auditor-General.

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Statement of Business

Note.—The Ordinary Premium is the premium charged

Wellington, 20th February, 1913.

TOTAL. TOTAL. YEAR 1912. No. Annual gum Eever- Premiums. Annuities. assured. botmSL 1 - Ordinary. 1. Immediate j Bonuses. .,. Extra, j 2 . Deferred. Whole-life and Term Assurances. Annual Sum Rever- Premiums. No- assured. B ™ lr OrcUnary. 2. Extra. POLICIES ISSUED AND DISCON- £ £ £ s. d. £ s. d. £ £ £ s. d. Policies in force at 31st December, 1911 New Business 49,376 3,994 11,514,657 1,042,264 1,168,620 ( 345,824 17 7 I 2,329 6 1 ( 29,789 19 4 I 54 12 11 16,992 2 10 ) 4,413 7 0 J 1,371 10 10 1 5 17 0J 11,456 564 3,353,910 206,750 704,215 (77,852 9 2 1 1 1,499 2 6 f I 4,824 4 1 I 1 16 11 0 j" Bonus allotted 333,994 122,541 Total 53,370 12,556,921 1,502,614 ( 375,614 16 11 I 2,383 19 0 18,363 13 8 I 4,419 4 0j 12,020 3,560,660 826,756 ( 82,676 13 3) 1 1,515 13 6 J Policies discontinued during 1912 2,912 691,459 96,377 J 21,895 15 5 I 167 17 10 668 13 4 I 429 3 4 f 547 158,697 41,678 ( 4,547 10 3 ) 1 113 11 6 f Total policies in force at 31st December, 1912, 50,458 11,865,462 1,406,237 f 353,719 1 ( 2,216 1 17,695 0 41 3,990 0 8 j 11,473 3,401,963 785,078 / 78,129 3 0) I 1,402 2 Oj PARTICULARS OF POLICIES DISCONHow discontinued. By Death 460: 117,174 25,698 I j I 1 3,870 10 9) 90 5 8f 4,761 19 5) 24 19 11f 5,730 12 10 24 15 1 704 13 4 278 83,337 21,831 f 2,508 4 8 ) t 85 16 3 f Maturity 579| 122,904 28,509 Surrender 830| 193,681 11,168 296 5 0 135 37,310 5,061 f 969 0 1! 1 20 6 5 f Surrender of Bonus.. 21,103 11,313 Lapse Expiry of Policy Expiry of Premium.. 1,042 1 257,250 500 9,899 ( ( 7,240 10 5) 20 19 0) 5 11 8) 137 16 8) 148'13 81 6 18 2f 96 18 4 133 1 37,550 500 3,473 ( 895 16 1 I I 4 7 8f J 5 11 8 J J 111' 9 2 i 57 8 7 ) I 3 1 2 [ Miscellaneous Total 2,912 691,459 96,377 J 21,895 15 5) I 167 17 10) 1,097 16 8 547 158,697 41,678 j 4,547 10 3 ) 1113 11 6 I 'ROGRESS OP BUS NESS OF T HE GOVE] INMENT Li: 'E INSURANCE Total issued .. 121,813 29,576,704 2,907,530 (913,674 13 10) I 14,619 17 4f J559,955 12 4) { 12,403 16 2/ 89,887 16 2 40,72312,084,446 1,714,585 (317,516 18 111 t 10,849 14 41 (239,387 15 11i 1 9,447 12 4J Total void 71,355 17,711,242 1,501,293 68,202 15 2 29,250 8,682,483 929,507 Total in force 50,458 11,865,462 1,406,237 353,719 1 6 21,685 1 0 11,473 3,401,963 785,078 78,129 3 0 Extra Premiums Reduction of Pre; 2,216 1 2 118 11 5 1,402 2 0 liums 1 >y Bonus, ■c. £356,053 14 1

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at end of Year 1912.

afc the true age; the Extra, the additional premium imposed for any reason whatsoever. J,. H. Richardson, Commissioner. Moekis Fox, Actuary.

Approximate Coat of Paper.— Preparation, not giren ; printing (5,500 copiee), JJIO 10s.

By Authority: John Alaukay, Government Printer, Wellington.—l9l3. Price 6d.]

ASSURANCES. ANNUITIES. SIMPLE ENDOWMENTS, INVESTMENTS, ETC. Endowment Assurances. Annual Sum Sever- Premiums. N °- assured, "el i. OnUnar*. a. Extra. Annual Premiums. Annuity Assurances. 1. Sum - Nn o aS Hfil«v' Deferred Annual sionary' Annuities. Premiums. Bonuses. Annuity Assurances. Annuities. ■KT Annual "°- Premiums. i, immediate. 2. Deferred. 1. Sum assured. Annual No. 2. Bever- Premiums, eionary Bonuses. TINUED DURING THE YEAR 1912. £ £ £ s. d. £ £ s. d. £ s. d. £ s. d. £ s. d. £ £ s. d. 36,419 7,998,520 463,165 (261,723 14 1) ( 830 3 7) I 23,681 6 91 t 38 1 11) 87 j 18,821) I 1,240/ { 615) 4,307 7 0 1,013 9 3 f 373! 1 4 ( 28 10019 11 16,992 2 10) 106 0 0/ 1,371 10 101 1,037 143,406) 43,5001 i '.'. \ \ 139/ 5,134 5 2 3,115: 791,964 5 17 0 3 5 0 287 1,281 3 6 210,699 39,534 8,790,484 673,864 (285,405 0 101 t 868 5 6) 87 f 18,871) t 1,855) 4,313 4 0 1,016 14 3 I 401 1 4 100 19 11 18,363 13 81 106 0 0) 1,324 (186,906) t 139 f 6,415 8 8 2,261 518,610 : 54,497 ( 16,736 3 0) I 54 6 4( j 1,626! 1 162 J 343 3 4 91 16 4 I 1* 1 3 94 19 5 668 13 41 86 0 0/ 801 f 12,526) t 40/ 425 6 5 37,273 |8,271,874; 619,367 [268,668 17 101 1 813 19 2/ HO I 17,245) t 1,693) 3,970 0 8 924 17 11 f 387 I 1 17,695 0 4] 20 0 0/ 1,244 (174,380) 1 99/ 5,990 2 3 6 0 6 TINUED DURING THE YEAR 1912. 166 558 33,837 120,478 3,867 28,469 ( 1,323 1 8 1 t 4 9 5 f f 4,682 2 B I I 24 19 11 I j 4,401 15 10 i 1 4 8 8} 16 39 4 5 704 13 4 21 j 2,426) 40/ 7,300) 79 17 0 649 147,645! 5,996 5 f 1,376) 246 5 0 I Hi} 1 -sol - 250) 96 18 4 I 21 f 78 3 5 1 55 15 0 50 0 0 40 225 18 6 9,760 888 216,650 6,405 j 6,223 8 3) t 16 11 4 / 2 12 19 0 19 1 2,800) 108 7 1 I 22 12 8 I 83 2 2 1 \ 3 17 0 j 0 13 11 3 14 10 7 9 0 f 1,626) 343 3 4 t 162/ ■ 91 16 4 17 425 6 5 2,261 518,61' 54,497 (16,736 3 0) t 54 6 4/ 7 94 19 5 754 13 4 ( 12,526) I 40) DEPARTMENT SINCE DAT OF ESTABLISHMENT TO 31st DECE BER, 1912. 75,627 38,354] 37,273 16,992,6191,186,993i| * ®} 1, I ft 720 741 W7fi9fiil 305 ' 314 6 1O l 1 8,720,745 5o7,b26|j 2)956 g 10 [ 1. 8,271,874 619,367 268,668 17 10 813 19 2 ] ' io6 r 5 5:?59fj 57 ' 278 6 6 1,026 { 14 2'o66/ 53 ' 308 S 1O i on J Q QTA ft q ,106 j 1 ,026 j 1 ' 80 I I 17,245) I 1,698/ L57.300 5,759 140,055 4,066 17,245 1,693 9f 57,. B| (to I 5) 3 , 8/ d, ' 278 6 308 5 970 0 6! 10' 8 8,392 9 6 17,467 11 7 721 333 348 0 10 342 0 4 32,609 9 8 14,894 9 4 3,631 2,39! ( 842,889 1 1343 3 lgll (. 19d J | 167,9 S} 7,443 17 8 { 174 ' 5,990 2 3 3,970 0 8 924 17 11 388 6 0 6 17,715 0 4 1,244