A BIG BUSINESS

Bay of Plenty Beacon, Volume 4, Issue 137, 4 August 1941, Page 2

A BIG BUSINESS

LIFE INSURANCE PREMIUMS TOTAL £4,0001,000 , Life insurance is a big business i in New Zealand. The latest available ■ figures, published in the Official ■ Year Book, show that New Zealandcrp pay out a sum of more than , £1,600,000 a year in premiums on ordinary life insurance, and that the 392,500 policy holders who contribute » this amount have their lives insured for an aggregate amount of £148,710000. On the basis of individual averages the sum assured is £379, andj the average premium per policy is £11 4s 7d. In the five years from 1935 to 1939, the number of policies has increased by nearly 100,000, the aggregate sum assured by more titan £48,000,000, and the amount paid out in premiums each year by jus,t over £1,000,000. Each of the three years 19351937 was characterised by a remarkable increase in the amount issued when compared with the year immediately preceding, culminating ; n the record amount of £19577,00'0 for new business in 1937. A large part of the new business issued during these three years was evidently due to the necessity, during the 3 r cars of financial stringency, of deferring the acquisition of adequate life assurance cover until a more favourable time. The greater amount of the postponed demand seems to have been satisfied in 1936 and 1937, comments the Year Book, a'nd the smaller levels of new issues in 193S and 1939 arc therefore not surprising. The amount of discontinuances which in 1932 actually exceeded tlieamount of new business -written, gradually fell back each year frc»m 1932 to 1935. Thereafter the discontinuances commenced to rise in sympathy with the increased amount of new business. The net result of the transactions for the year 1939 was an increase of £8,420,000 on the sum assured in force at the end, of the preceding year compared with the corresponding rises of £8,722,000 and £12,900,000 for 1938 and 1937 respectively. Average Policy Value. The average sum assured for each new policy taken out in 1939 was £404, compared with £383 jiin 1938 and £404 for the average of the predepression period 1926 to 1930.:' Jn 1923 this figure had reached £423 i. hut a sharp decline of £49 in 1931 was followed by further decreases in 1932 and 1933, the figure ;of the latter year being £341. Since then a steady upward movement has been recorded. There was no single reason for the dciay, until 1939, in regaining the pre-depression level in regard to the average sum assured, but it seems probable that a larger proportion than usual of the new policies issued from 1936 to 1938 inclusive wei're in the nature of smaller policies required to supplement existing but inadequate insurance cover. The per-policy. average for neAV assurances in 1939 was £11 17s 3d, as compared with £11 lis Id in 1938.. A! statement of the aggregate revenue and expenditure for all the companies operating in the Dominion, so far as ordinary business is concerned, further illustrates the progress of business during the last five years. In 1935 the total revenue was £5.386.000, and the. t.btn! expenditure £3,365,000, leaving an excess of revenue of £2.021.000; I,hie totals for 1939 were: Revenue £6,-« 829,000, expenditure £4,901,000, excess of revenue £2,735,000.