H.—-6

1925. NEW ZEALAND.

STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1924.

Presented to both Houses of the General Assembly pursuant to the Provisions' of the State Fire Insurance Act, 1908.

State Fire Insurance Office, Wellington, 4th June, 1925. I have the honour to submit the twentieth annual report of the State Fire Insurance Office, for the year ended 31st December, 1924, together with Revenue Account and balance-sheet. Income. —The total net revenue from all sources amounted to £190,300, showing an increase of £21,051 over 1923. The net premium income was £165,070, as compared with £154,164 for 1923, the increase for the year being £10,906. Claims. —The claims for the year totalled £60,817, as against £46,178 for 1923. A majority of the fires continues to arise from preventable causes, and an awakening of public interest in the problem of fire waste could hardly fail to have the effect of reducing the present annual loss, thus preserving national wealth, which at present is being dissipated, and warranting further reductions in insurance rates. All too often it is forgotten that from a community point of view fire insurance saves nothing : it merely distributes the loss. Official records show that the aggregate amount paid out by all offices in insurance losses in New Zealand during 1923 was £796,281. Figures are not yet available for 1924, but the loss will certainly be much higher than for 1923. Bearing in mind that the amount paid by insurance offices represents only part of the fire waste, it may be estimated that a million and a quarter pounds' worth of community-made wealth was converted into smoke and ashes and thus utterly lost during 1924. Working-expenses.—Exclusive of Government taxes, which amounted to 8-68 per cent., the working-expense ratio to premium income was 29-48 per cent., and without Fire Board contributions and depreciation of office premises only 25-1 per cent. The expenses include the Department's contribution to the Public Service Superannuation Fund, which was paid for the first time, and expenditure on office equipment for the new Head Office, and new branch offices at Palmerston North and New Plymouth. The average net working-expenses for all offices for 1923, as shown in the Government Statistician's returns, was 36-05 per cent, exclusive of Government taxes. Bonus Rebate. —The first bonus rebate declared under the provisions of the State Fire Amendment Act, 1922, was fixed by the Board at 15 per cent, for twelve months from Ist August, 1923, and therefore operated during the first seven months of 1924. During this period the loss ratio rose very considerably above that of the same months of 1923, and the Board, after full consideration, considered it prudent to reduce the percentage to 10 per cent, for the period of the second rebate—viz., Ist August, 1924, to 31st July, 1925. The sum granted in rebates to State Fire policyholders during 1924 was £22,005, or an average of 13 per cent, of the premium income for the whole year. The amount granted during 1923 was £10,996, making a total of £33,001 for seventeen months. Theinstitution of the rebate system by the State Office necessarily involved the associated companies in a similar concession to their policyholders, and the Government Statistician estimates the total saving to the insuring public on account of the first rebate as £340,000. On this basis the two rebates will have saved over £560,000. Surplus and Assets. —The surplus for the year, after providing for the bonus rebate (£22,005). and all necessary reserve funds, and the writing-down and depreciation of office premises and furniture,, amounted to £31,131, of which £5,902 was derived from underwriting profits for the year. The assets, £530,283, for the first time exceed half a million pounds, showing an increase of £36,322 over the total for 1923.