INSURANCE.

Dominion, Volume 3, Issue 886, 4 August 1910, Page 2

INSURANCE.

MERGING OF COMPANIES,

TENDENCY OF THE TIMES. Mr. A. E. Wall, Superintendent in Australia of the London and Lancashire Insurance Company, who arrived from Sydney yesterday, ' was requested by a Dominion* representative yesterday to outlino the position arising as a result of the. absorption of the Australian Alliance Insurance Company by the London and Lancashire. Mr. Wall, whose headquarters are in Melbourne, is at present in Wellington in connection with this undertaking. The Australian Alliance, he explained ,is to be maintained as a separate company with separate board of directors, separate funds, and a separate! organisation throughout Australasia. . It will, in fact, carry on an independent business just as hcrctufoie. The benelit; from the standpoint of the Australian Alliance policy-holders, is that they will now have behind- them the. whole of the assets of tho London and Lancashire, amounting to lour millions sterling. Agents of the company; under the changed conditions, will llavn increased facilities for handling business owing to tho improved funds. In fact, Mi-. Wall .states, the new order will Ixj better for both clients and agents. The London ■ and Lancashire Company has obtained a good investment for its spare capital, and, in Mr. Wall's phrase, "a sound volume of non-hazardous business."

The amalgamation was only completed in October last, although tho liabilities of the absorbed company were taken over on September 1, im. .The results, Mr. Wall states, have been satisfactory. The Australian Alliance business in the North Island of New Zealand has been for some years past under the management of Mr. A. E. Kernot. In consequence, however, of the development of Mr. Kernot's mercantile business, ho has decided to give up the insurance department in his office, and is therefore relinquishing the agency. The directors of tho Australian Alliance nave accepted his resignation with'much regret. Pending definite arrangements for the future conduct, of the agency, it will be controlled by Mr. W. Jl. Saunders, temporarily located in Messrs. Johnson and Co.'s office, corner of Panama and Featherston Streets. / •

"There is," Mr. Wall Temarked, "a general, tendency throughout the world towards the amalgamation. ■ of. insurance companies. This may be attributed to a growing recognition by tho companies of. the necessity for reduced responsibilities and to the public demand for absolute.security. This can only be given by substantial reserve funds. It is therefore strictly natural that there should bo a drift of the smaller companies into the arms of their larger contemporaries. This tendency is not confined to insurance com. panics: , It is a tendency of the age, and there is probably no field of commerce in which it is more legitimate than insurance. When one company is liable to be called upon, as tho London and Lancashire was in tho case of the San Francisco earthquake conflagration, to pay a million and three-quarters, a union of forces is absolutely necessary. A great number of companies have already merged their identity, and tho process may lie expected to continue."