ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1935.

Appendix to the Journals of the House of Representatives, 1936 Session I, H-06a

11. • ISA.

1936. NEW ZEALAND.

ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1935.

Pretented to both Houses of the General Assembly pursuant to Section 22 of the Government Accident Insurance Act, 1908.

State Fire Insurance Office, Wellington, Bth July, 1936. I have the honour to submit the thirty-fifth annual report of the Government Accident Insurance Office, for the year ended 31st December, 1935, together with the Revenue Account and Balance-sheet. The following comparison with the previous two years shows the position in brief :— 1933. 1934. 1935. Income—- £ £ £ Premiums from all classes of accident insurance .. .. 80,207 84,727 97,766 Interest .. .. .. .. .. .. 15,240 15,170 14'936 Premium on conversion of securities .. .. .. .. 157 2,105 Outgo— Free-year bonus on personal accident policies .. .. 272 255 231 Claims .. .. .. .. .. .. 48,593 62,035 66,172 Working-expenses (exclusive of income-tax) .. .. 16,865 17,962 20,330 Carried to reserve for unearned premiums .. . . . . . . j 662 Income-tax .. .. .. .. .. .. 10,787 5,504 4,127 Per Cent. Per Cent. Per Cent. Ratio of claims (all classes of business) to premium income 60 '58 73-22 67-68 Ratio of working - expenses (exclusive of income - tax) to premium income .. .. .. .. 21-03 21-2 20- 8 Ratio of underwriting surplus to premium income .. 18-05 5-28 9-58 Surplus, apportioned as follows: — £ £ £ Investment Fluctuation Reserve .. .. .. 15,000 Reinsurance Reserve .. .. .. . . .. .. 10,000 10,000 Payment to Treasury under section 5, Finance Act, 1931 (No. 2) —10-per-cent. reduction in salaries . . . . 1,174 293 Reserve Fund .. .. .. .. .. 2,755 4,005 12,284 £18,929 £14,298 £22,284 Reserves and funds as at 31st December .. .. .. £342,508 £356,513. £380,459 1. The income of the Accident Branch is derived from a number of different classes of insurance—'-, the main classes being Workers' Compensation, Personal Accident, Public Risk, Motor Comprehensive, Third-party Risk Act, Plate Glass, and Fidelity Guarantee—and under each heading there has been an increase in income during the year. The aggregate premium income is greater than in any other year since 1931, and may be taken as reflecting a welcome return to more prosperous conditions. 2. During the year the State Accident Office introduced a new flat-rating system for private cars, which greatly simplified existing rating procedure, and reduced premiums. So far as can be ascertained, these reduced premiums are lower than in any other part of the Empire. One effect has been to increase substantially the share of motor-insurance business held by the State Accident Office.

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As the new system and the lower rates were immediately adopted by insurance competitors, all private motor-vehicle owners, whether insured with this Office or not, have benefited by State competition. 3. The operation of the Motor-vehicles Insurance (Third-party Risks) Act, 1928, with the drafting and early administration of which the Office was closely associated, brings substantia] support to the Office by way of nominations, and affords a cumulative experience of the effect of the legislation which will be most valuable when amendments are under consideration. The Act at the time it was passed was an advance on any legislation of the kind in any part of the world, and it remains in the lead to this day. More complete insurance protection to the injured person and the motor-vehicle owner is afforded at a lower cost than in any other country, and the compulsory system has worked with a surprising absence of friction. There can be little doubt that the principles of the Act have the good-will of the public as a whole ; perhaps it might be said even that the successful operation of the legislation is responsible for some perceptible movement of opinion towards a more liberal idea of the rights of persons injured by motor-vehicles. 4. For the fourth successive year the Accident Branch has acted as Claims-settling Agent for the Unemployment Board without charge for the services which have been rendered. 5. I have pleasure in recording once again my high appreciation of the very valuable service given by every member of the staff of the Accident Branch during the year. J. H. Jerram, General Manager.

Revenue Account of the Accident Branch of the State Fire Insurance Office for the Year ended 31st December, 1935. £ s. 4. £ s. d. Premiums after deduction of reinsurances .. 97,766 1 10 Free-year bonus on personal accident policies .. 230 15 4 £ s. d. Claims .. .. .. .. .. 66,171 15 10 Interest .. .. 14,935 14 9 Commission .. .. .. .. 4,138 10 1 Less land and income tax .. 4,127 9 4 Salaries .. .. . . .. .. 12,076 15 0 t 10,808 5 5 Contribution to Public Service Superannuation Premium on conversion of securities .. .. 2,105 5 0 Fund .. .. .. .. .. 175 5 0 Expenses of management . . . . . . 3,940 0 6 Further appropriation to reserve for unearned premiums .. .. .. .. 1,662 7 1 88,395 8 10 Further appropriation to Reinsurance Reserve . . 10,000 0 0 Amount of Accident Funds, 31st December, 1935 12,284 3 5 £110,679 12 3 £110,679 12 3 Balance-sheet of the Accident Branch of the State Fire Insurance Office as on the 31st December, 1935. Liabilities. £ s. d. Assets. £ s. d. Accident Funds, as per Revenue Account .. 12,284 3 5 Government securities .. .. .. 178,363 3 0 Outstanding accident claims .. .. .. 55,315 0 0 Local-authority securities .. .. .. 136,935 3 6 Government taxes .. .. •• •• 10,127 9 4 Rural Advances bonds .. .. .. 14,425 0 0 Commission .. .. .. •• 452 17 3 Property under agreement for sale and purchase 3,980 0 0 Premium and other deposits .. .. .. 232 16 3 Fixed deposits and at short call .. .. 40,000 0 0 Sundry creditors .. .. .. • ■ 32 7 6. Interest accrued but not due .. . . .. 3, 504 1 4 Officers' Fidelity Fund .. .. .. 500 0 0 Interest overdue .. .. .. .. 199 0 0 Reserve for Unearned Premiums .. .. 48,883 011 Agents'balances .. .. .. .. 1,913 11 5 Investment Fluctuation Reserve .. .. 41,000 0 O ; Sundry debtors, including Motor-vehicles InsurReinsurance Reserve .. .. .. 20,000 0 0 ance (Third-party Risks) Act pool .. .. 56,193 9 2 Bad Debts Reserve .. .. •• •• 1,000 0 0 Cash in hand on current account .. .. 11,106 10 1 Reserve Fund constituted under section 6 of the Government Accident Insurance Amendment Act, 1924 .. .. .. .. 256,792 3 10 £446,619 18 6 £446,619 18 6 J. H. Jerram, General Manager. 3rd July, 1936. B. H. Osborn, Deputy General Manager. I hereby certify that the Revenue Account and Bala;n,ce-sheet have been duly examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— G. F. C. Campbell, Controller and Auditor-General. Approximate Cost of Paper.—Preparation, not given; printing (1,310 copies), £3 15s.

By Authority: G. H. Loney, Government Printer, Wellington. —1936.

Price 3d. ]

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