J. KIRKER. :

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I.—B.

unusually large number of losses during the second year, or, on the other hand, a comparative freedom from loss. Even if you take a period of five, ten, fifteen, or twenty years you will find the same variation. In an. experience of, perhaps, twenty years you may have no conflagrations, but in the twenty-first year you may have a conflagration involving the loss of millions of money to the insurance companies, which altogether alters the price. Well, gentlemen, from what I can gather, supporters of State fire insurance have quoted my company as a standing monument of the extremely profitable nature of underwriting. Of course, it is very gratifying to my directors and myself to find our company spoken of in this way, yet we do not like you to labour under a misapprehension. My company is a New Zealand company. Its headquarters are in Auckland. We have been established thirty years. We have nearly four hundred shareholders, nearly the whole of whom reside in New Zealand. Our net revenue last year from premiums amounted to £234,000. This year, I dare say, the sum will be close upon £250,000. Our premium revenue is derived partly from fire business and partly from marine. Four-fifths of our total revenue comes from outside New Zealand. We are doing business throughout Australia, South Africa, India, China, Japan, the Malayan Peninsula, Fiji, and in London. I have just remarked that four-fifths of our business comes from outside New Zealand : one-fifth only comes from New Zealand, and, if you eliminate from that proportion of our revenue from New Zealand our marine business in New Zealand, about one-sixth only of our net revenue is from fire business in New Zealand. During the last twelve years, of all the Australian or New Zealand companies, our company, I am pleased to say, has been the most prosperous in its underwriting operations. Our underwriting profit for the last twelve years has amounted to an average of 875 per cent, per annum ; that is to say, for every £100 we have taken in premiums we have made a profit of £8 15s. And, mark you, we have been the most successful company in Australia or New Zealand. The New Zealand Insurance Company's average profit for the last twelve years on its underwriting has amounted to 7 per cent. That company, like ourselves, also does business all over the world. 3. Mr. G. J. Smith.'] The underwriting is based on the premium income, without taking investments into account ?—That is so, they have nothing to do with the underwriting. The National Company's operations are limited entirely to Australia and New Zealand. Its average underwriting profit has been 8-83 per cent., which is £8 16s. and some pence per £100. The Standard Insurance Company is also limited entirely in its operations to Australia and New Zealand. Its underwriting profit over the same period has been 857 per cent., which is £8 11s. per £100. Well, now, we ourselves have made, from the whole of our premium revenue, fire and marine business, 8-75 per cent, profit on our underwriting for the last twelve years. That does not convey much to you ; but I hope it will convey this : that the profit that we make is not very large. A general reduction in rates all round of 10 per cent, would mean a dead loss to us of some thousands of pounds every year. You will be interested now to know of our experience of fire-insurance business in New Zealand. That, I take it, is what you want to get at. I have a little hesitation in giving you this information, because you can understand that companies do not like to tell each other what they are doing, whether they are doing well or badly. But I am going to expose my hand a little freely to you gentlemen, because I am desirous that you should have good information. I have already told you that, of our net revenue of about £240,000, one-sixth comes from our fire-insurance business in New Zealand. During the last twelve years our underwriting profit on the New Zealand fire business has amounted to 4-22 per cent. For every £100 in fire premiums that we have taken in New Zealand during the last twelve years we have made a profit of £4 4s. Now, gentlemen, that, I think, is a complete answer to the charge that the rates which the companies are charging and have been charging in New Zealand are exorbitant and leave too large a margin of profit. Well, you people who are outside insurance business altogether, and who probably do not know much about the business, can form a conclusion as to whether the rates are too high or not in New Zealand from another point of view, but I would ask that the information on this point that lam going to give you be not taken down and printed. [The witness here gave some information which was not taken down in shorthand by the reporter.] Well, now, the statement has been made that during the last few years rates have been " jumped up " on the public in New Zealand. I have a statement here—not prepared for the Committee—which is part of my statistical system since I took charge of the South British Company, in 1890. Here it is : In 1890 the average rate that we got in the Provincial District of Auckland for all risks amounted to 16s. Bd. per cent. For the year just ended the average rate for the provincial district was 13s. 5d. —a reduction in the average rate of 3s. 3d. per cent. In the Provincial District of Wellington in 1890 the average rate was just 20s. per cent. For the year just ended it was 19s.— a reduction of Is. In Canterbury the average rate in 1890 was 15s. 3d. ; for the year just ended it was 12s. Bd.—a reduction of 2s. 7d. In Otago the average rate in 1890 was 9s. 7d. ; for the year just ended it was 12s. Id.—an increase of 2s. 6d. per cent. That is explained in this way : For many years prior to 1890 and up to 1895 there was no tariff at all in Otago and Southland, and I may tell you, gentlemen, that up to 1895 my company made a dead loss on its fire underwriting in the Provincial District of Otago and Southland. The increase of 2s. 6d. per esnt. on the whole of our Otago and Southland business under the new tariff in 1895 resulting in turning a loss into a small profit. In the Nelson Provincial District in 1890 the average rate was 245. 10d.; in 1901 it was 20s. 10d.— a reduction of 4s. per cent. In Hawke's Bay in 1890 the average rate was 235. lid. ; in 1901 it was 20s. Bd.—a reduction of 3s. 3d. per cent. On the West Coast—Hokitika and round about there— in 1890 the average rate was 375. 10d.; in 1901, 30s. —a reduction of 7s. 10d. per cent. For Greymouth and up that valley, in 1890 the average rate was 335.; in 1901 it was 245. sd.—a reduction of Bs. 7d. per cent. For the last eleven years the average rate has been less to my company, and the experience of the other companies must necessarily have been the same. What has happened is this: When the tariffs which the companies adopted in 1895—and which are the most scientific 3—l. 8.