ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1949

Appendix to the Journals of the House of Representatives, 1950 Session I, H-06a

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1950 MEW ZEALAND

ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1949

Presented to Both Houses of the General Assembly Pursuant to Section 22 of the Government Accident Insurance Act, 1908

By Authority: R. E. Owen, Government Printer, Wellington.—l9so.

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State Fire Insurance Office, Wellington, 31st May, 1950. I have the honour to submit the report and balance-sheet of the Government Accident Insurance Office for the year ended 31st December, 1949. Under the Workers' Compensation Amendment Act 1947, Part I, which came into effect as from the Ist April, 1949, an Employers' Liability Insurance Account was established, and I am required under the Act to submit a revenue account and balance-sheet as at the 31st December in each year in relation to the Employers' Liability Insurance Account as separate and distinct from the fund assets and liabilities of the other business of the State Fire and Accident Insurance Office. I therefore submit the report and supporting accounts in two parts, on the one part the forty-ninth annual report and balance-sheet of the Government Accident Insurance Office, and on the other part the first report and balance-sheet of the Employers' Liability Insurance Account for the period Ist April, 1949, to 31st December, 1949. GOVERNMENT ACCIDENT INSURANCE ACCOUNT (GENERAL BUSINESS) The following comparison with the two previous years shows the position briefly 1947. 1948. 1949. Income — £ £ £ £ £ £ Unearned premiums reserve at Ist January.. 182,201 210,014 233,023 Premiums .. .. .. ..420,028 466,046 337,716 602,229 676,060 570,739 Less unearned premiums reserve at 31st December .. .. .. .. 210,014 233,023 179,931 Earned premiums .. .. .. 392,215 443,037 390,808 Interest and other income .. .. .. 27,826 30,160 30,179 420,041 -473,197 420,987 OutgoBonus and profit-sharing schemes .. .. 24,623 33,338 5,364 Claims .. .. .. ..292,304 318,329 308,816 Working-expenses .. .. .. 81,905 98,062 80,798 398,832 449,729 394,978 Surplus, apportioned as follows — Government taxes .. .. .. 8,268 14,570 22,900 Reinsurance Reserve .. .. .. 10,000 Reserve Fund .. .. .. .. 2,941 8,898 3,109 21,209 23,468 26,009 420,041 473,197 420,987 Reserves and funds as at 31st December .. 777,800 809,706 759,723 Per Cent. Per Cent. Per Cent. Ratio of claims to earned premiums .. .. 74-53 71-85 79-02 Ratio of working-expenses to earned premiums 20-88 22-13 20-67 Ratio of underwriting deficit to earned premiums 1-69 1-51 1-07 The net premium income for the year was £337,716, being £128,330 less than that of the previous year. This decrease is more than accounted for by the transfer of the workers' compensation insurance business previously carried on by the Office under the competitive system to the Employers' Liability Insurance Account set up under the Workers' Compensation Amendment Act, 1947. Notwithstanding this loss of premium income the business of the Office has shown considerable progress, and the result of the years working can be considered, in the circumstances, very satisfactory. The members of the staff have again rendered excellent service during the year, and I desire to express my thanks to them for their co-operation and efficient assistance.

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EMPLOYERS' LIABILITY INSURANCE ACCOUNT The following shows the financial result briefly : Income —• £ £ £ Premiums .. .. .. .. .. .. 1,498,435 Less unearned premiums reserve .. .. .. .. 499,478 Earned premiums .. .. .. .. .. .. 998,957 Interest .. .. .. .. .. .. 8,663 1,007,620 •Outgo— £ £ Claims .. .. .. .. .. .. .. .. 691,479 Working-expenses .. .. .. .. .. .. 145,982 Alterations to buildings and furniture and equipment written off .. 35,888 873,349 •Surplus apportioned as follows — Provision for Government taxes .. .. .. .. .. 85,570 Net surplus .. .. .. .. .. 48,701 134,271 £1,007,620 Per Cent. Ratio of claims to earned premiums .. .. .. .. .. 69 • 22 Ratio of working expenses to earned premiums .. .. .. .. ..14-61 Ratio of net surplus to earned premiums .. .. .. .. .. .. 4-88 As the premiums received are for a twelve months' period up to the 31st March, 1950, and the outgo for a nine months' period only up to the 31st December, 1949, it has been necessary to take into account the value of unearned premiums in making calculations. During the period covered by this report approximately 90,000 employers were insured under the Fund. The claims ratio of 69-22 per cent, is not unduly high in view ■of the increase in compensation benefits. At the same time, a nine months' period is insufficient time in which to obtain a reliable guide as to what the experience on the present premium rates and benefit basis is likely to be. The working-expenses are a little higher than was hoped would be the case, but as the period covered was the initial period certain expenses will not recur and there is reason to expect that these will be capable of reduction in the future. In taking over the administration of the Employers' Liability Insurance Account this Office undertook a task which made it necessary to increase the existing staff very ■considerably, to provide additional accommodation and reorganize systems and methods to cope with the big expansion and increased volume of business, and at the same time give efficient service. In this connection both the older and experienced and the new .and inexperienced members of the staff gave of their best, and I would like to place on record my appreciation of their able and efficient attention to their duties and their co-operation and enthusiasm which added so much to the satisfactory result achieved. R. H. Newbold, General Manager.

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GOVERNMENT ACCIDENT INSURANCE ACCOUNT Revenue Account for the Year Ended 31st December, 1949 £ s. d. £ s. dReserve for unearned premiums at 31st December, 1948 .. 233,023 2 11 Bonus rebate to policyholders .. .. .. 5,363 18 3 Premiums after deduction of reinsurances .. .. 337,716 0 2 Claims .. .. .. .. .. •• 308,815 15 3 £ s. d. Commission .. . . .. • • • • 8,863 3 6 Interest .. .. .. 29,355 10 1 Salaries .. .. .. .. .. .. 54,807 0 0 Less income arid social security taxes on Contribution to Government Superannuation Fund .. 1,656 0 0 interest .. .. .. .. 14,003 17 '9 Expenses of management .. .. .. .. 15,471 19 3 15,351 12 4 Reserve for unearned premiums at 31st December, 1949 .. 179,931 2 11 Profit on realization of investments .. .. .. 812 0 0 Commission on profits .. .. .. 1150 574,908 19 2 Income-tax and social security tax on underwriting account 8,895 13 4 Accident Funds at end of year .. .. .. 3,109 7 11 £586,914 0 5 £586,914 0 5 Balance-sheet as at 31st December, 1949 Liabilities £ s. d. Assets £ s. dAccident Insurance Funds as per Revenue Account .. 3,109 7 11 Government securities .. .. .. .. 719,537 0 0 Outstanding accident claims .. .. .. 283,297 14 0 Local-authority securities .. .. .. .. 81,718 11 10 Government taxes accrued but not due .. .. 24,469 11 1 Interest accrued but not due .. .. .. 8,573 0 0 Commission .. .. .. .. .. 1,268 0 0 Outstanding premiums .. .. .. .. 8,520 1 10 Premium and other deposits .. .. .. 3,787 4 7 Motor-vehicles Insurance (Third-party Risks) Pool .. 236,658 2 1 Sundry creditors .. .. .. .. .. 1,602 4 2 Sundry debtors .. .. .. .. .. 6,819 16 Employers' Liability Insurance Account .. .. 88,770 13 7 Cash at bank .. .. .. .. .. 101,102 1 0 Officers' Fidelity Fund .. .. .. .. 500 0 0 Reserve for Unearned Premiums .. .. .. 179,931 2 11 Bonus Reserve .. .. .. .. .. 60,000 0 0 Investments Fluctuation Reserve .. .. .. 70,000 0 0 Reinsurance Reserve . . .. .. . . 66,000 0 0 Bad Debts Reserve .. .. .. .. 1,000 0 0 Reserve Fund constituted under section 6 of the Government Accident Insurance Amendment Act, 1924 .. 379,183 0 0 £1,162,927 18 3 £1,162,927 18 3 R. H. Newbold, General Manager. T. .L. Seator, Deputy General Manager. Ist May, 1950. I hereby certify that the Revenue Account and Balance-sheet have been duly examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— J, P, Rutherford, Controller and Auditor-General,

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EMPLOYERS' LIABILITY INSURANCE ACCOUNT Revenue Account for the Nine Months Ended 31st December, 1949 £ s. d. £ s. d. Premiums .. .. .. .. .. 1,498,435 1 5 Claims .. .. .. .. . 691,479 0 1 Interest .. .. .. .. .. 8,663 6 9 Salaries .. .. .. .. .. 111,205 0 0 Contribution to Government Superannuation Fund .. 3,194 0 0 Expenses of management .. .. .. 31,583 0 1 Unearned premiums reserve at 31st December, 1949 .. 499,478 7 1 1,336,939 7 3 Income-tax and social security tax .. .. .. 85,570 0 0 Alterations to buildings .. .. .. .. 23,244 8 9 Office furniture and mechanical equipment .. .. 12,643 8 3 Employers' Liability Insurance Funds at 31st December, 1949 .. .. .. .. 48,701 3 11 £1,507,098 8 2 £1,507,098 8 2 Balance-sheet as at 31st December, 1949 Liabilities Assets £ s. d. £ s. d. Reserve for unearned premiums .. .. .. 499,478 7 1 Government securities .. .. .. .. 750,000 0 0 Outstanding claims .. .. .. .. 326,265 .0 0 Outstanding premiums .. .. .. .. 16,935 3 10 Government taxes .. .. .. .. .. 85,570 0 0 Interest accrued but not due .. .. .. 2,897 11 10 Sundry creditors .. .. .. .. .. 10,540 0 0 Funds held in the State Fire and Government Accident Premium and other deposits .. .. .. 255 9 5 Insurance Accounts .. .. .. .. 200,977 4 9 Employers' Liability Insurance Fund .. .. 48,701 3 11 £970,810 0 5 £970,810 0 5 R. H. Newbold, General Manager. Ist May, 1950. T. L. Seatok, Deputy General Manager. I hereby certify that the Revenue Account and Balance-sheet have been duly examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— J. P. Rutherford, Controller and Auditor-General.

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Approximate Cost of Paper.—Preparation, not given; printing (1,934 copies), £l7 10s.

By Authority: R. E. Owen, Government Printer, Wellington.— 1950.

Price 6d.~\

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