The Akaroa Mail. TUESDAY, JANUARY 21.

Akaroa Mail and Banks Peninsula Advertiser, Volume 3, Issue 262, 21 January 1879, Page 2

The Akaroa Mail. TUESDAY, JANUARY 21.

We have received the report of the t.iovernment, Insurance Commissioner for the year ending June 30, 1878. The first thing that must strike the receiver is the extraordinary delay which has taken place in making the report public. Apart from this circumstance, which would seem to indicate that the work of the office is considerably in arrear, the report may be considered highly satisfactory. The first item which it deals with is the new business undertaken during the year. This is not only the first in order, but it also deserves to rank as of chief importance. No insurance office could possibly be considered in a satisfactory condition which did not transact a fair amount of new business during each year of its existence. The reason is obvious. As time goes on, policies cease to exist, from death and other causes. The expenses of management remain about the same, and if no new assurers came in to take, the place of those retiring, those expenses would fall on a reduced number of persons and a diminished income. It is satisfactory, therefore, to learn that " the amount of new business, notwithstanding the increased competition of foreign companies, has been greater than in any previous year, and exceeds the whole of the new business obtained by Life Insurance Companies in the colony during the same period." The number of new policies issued during the year is 1991, producing an annual income of £21,269, and assuring £680,600. Considering the limited population amongst whom the Department has to work, and the amount of competition that exists, this result is something surprising, and affords matter for congratulation for everyone who takes an interest in the welfare of the community.

Intimately connected with the amount of new business is the cost of obtaining it. This cannot be arrived at with exactitude, as there are certain items of expenditure of which only a share is fairly chargeable to the new business. But taking those portions of the expenditure which are unmistakably caused by this part of the business, and estimating a share of the remainder, we should set down the expenditure on this account at £10,815, or 51 per cent, on the new premium income secured. This seems a high rate, but is in reality a very moderate one, and is one which may even be considerably exceeded with perfect safety. In Great Britain it is not an uncommon thing for companies to spend up to the whole of the first year's income in securing business. It must be remembered that it is only the first year's income which is thus heavily weighted, and the charge when spread over the average duration of a policy becomes trifling. At the same time we should hail any reduction in this rate, provided it were unaccompanied by any diminution of business done, as a desirable improvement.

The next thing that claims attention is the summary of "policies discontinued." The claims during the year amounted to £11,250, under 42 policies, caused by the death of 37 persons. As there are 8844 existing policies, this means that the office has experienced a death-rate of only 0-47 per cent., or, in other words, that rather less than 1 in every 200 of the assured has died. This is considerably under the rate of mortality which might reasonably have been expected, and on which the tables are based. This means a clear gain to the remainder of the policy-holders, and points to the fact of great care having been exercised in the selection of lives. Rather a large number of policies have lapsed during the year, no less than 304, assuring £91,600. We know that many of the public are of opinion that these lapses are a gain to an assurance office, but every practical ; man is aware that the reverse is the case ; in fact, as a contemporary puts it, that every lapse is both pecuniarily and morally a loss. Two causes combine to bring about tlu'se lapses. One is the zeal of agents, who persuade men into assuring who are not really in earnest about the matter, and who, after paying one or two premiums, let the whole thing " slide." We do not know that this can be avoided. Many a man has been persuaded into effecting an assurance, who has afterwards blessed the day when the agent encountered him. It is impossible for the latter to foresee that others will be more fickle, and fail to keep up their payments. The other cause is more within the control of the Department, and consists in the very low remuneration paid for collection of renewal premiums. If a man comes to a postmaster to pay his renewal premium, of

course the'latter will receive it, but if from any cause he does not make his appearance within the prescribed time, the post-master has no inducement whatever to make it worth his while to endeavor to see the policy-holder, and induce him to renew. Taking the total income, we find thatthe expenses of management amount to 14*7 per cent., a very low rate, especially for so young an office. It may be thought that _in devoting the space we have to an analysis of the proceeedings of this Department we are travelling outside matters of public interest, but a moment's consideration will show this is not the case. Every taxpayer iv the. community (and that includes every man, woman, and child) has an interest, direct or indirect, in the stability and prosperity of the Government Insurance Office. We are all shareholders in the concern, whether we like it or not.- None but policy-holders can participate in any profits that may accrue, but the State, consisting of the aforesaid taxpayers, stands pledged to ■make good any deficiency that may arise. So much for the direct interest we have in the matter. And then* the-, indirect interest is no less. In how many cases has that. £18,250, which we learn was paid last year under policies, prevented a bereaved family from becomiug a burden on public charity or private benevolence? Would it be unsafe to hazard an opinion that it has done so in the vast majority of instances ? We think not. Depend upon it, when public opinion lias become sufficiently instructed on this all-important topic of life .assurance in all its branches, and when, if ever, its chief enemy, selfishness, has been overcome, the " charitable aid" question will have received its quietus.