NATIONAL MUTUAL LIFE

Dominion, Volume 10, Issue 3030, 17 March 1917, Page 12

NATIONAL MUTUAL LIFE

TRIENNIAL MEETING EFFECT OF THE WAli. The triennial investigation meeting of the National Mutual Lite Association of Australasia, Limited, was held at Melbourne on 28th February, when Mr. Andrew Neweil, chairman* of directors, presided. The Chairman, in moving the adoption of the report, said: "If I had been, able to foretell the world's events when we met to receive the last investigation report my anticipation of the results of the association's business for the three years just ended would not have been bright. Within six months of tho date of our meeting the -world was at war on a scale that had never ueen known; commerce was disorganised; the money markets collapsed; old standards of values disappeared; and many new and difficult problems arose. Every financial institution was in some way affected, and life insurance companies in a special degree. The values of the securities in which ithoir millions of funds were invested were threatened, and a new element, tho effect of which could not be measured, was introduced into the risk of death which their policies covered. This was the state of affairs from the end of the first year of our triennium, and you can understand that those -who are responsible for the direction of the association's business have not been free from anxiety regarding the figures that they would have to put before you at this meeting.

"The report contains full details of what we have done, and I doubt if the most sanguine prophet amongst us three years ago could have expected such results, even if our surroundings had been of the most favourable nature. ■ NEW BUSINESS. "In new business we issued nearly ten millions of assurances; our income" was .£4,690,298, or over .£812,000 more than tho income of the previous three years; we paid to our members, or their "representatives, oyer .£2.050,000 which is cC505,000 nior' than the previous figures • and we added -C 2.127.000 to the assurance fund. '

Now, the object of the investigation which is made once in three years is to find the net result of our operations, itvery policy that is issued and every premium that is received increases the liabilities of the association by an amount that can be definitely ascertained, and (ho actuary's objeot is to find out whether the amount that has been added to the fund, after payment of all claims and expenses, is sufficient to cover the increase in the liabilities. The report shows that the amount added is X 759.533 in excess of the amount which represents the. increased liabilities, and the directors have decided, in accordance with the articles of association, that this amount shall be returned to those who paid it. It is „CM9,519 greater than the amount that wa.s available out of the revenue of the previous trjennium, but it -would have been .£242,467 greater if file liabilities had beep valued on the basis that was used at the last investigation.

STRENGTH OF THE KESEKVES.

ft has been the policy of the association at successive investigations to gradually increase the strength of (he reserves m a way that' was perfectly equitable, and would not disturb the relative interests of the different classes pi members; but this is the largest amount that has yet been so appropriated. 4 "Ydumay ask where this surplus or excess in our funds comes from. There are three principal sources from which it is derived—premiums paid by members in excess of the amount required; interest received from the investments of the association in excess of the rate that it was assumed at last investigation they would produce; and savings owing to the rate of mortality amongst our policy holders being less than we anticipated and provided for. "From the first source an important contribution to the surplus was derived. As the report tells you, our expenses for the three years were .£14,000. less than the expenses of the ' preceding three years, although our income was ,£812,510 greater. This is a remarkable feature of the report, and itis effect will be understood when I tell you that our funds are •£123,000 greater than they would have been if the rate of expenses had been the same as it was durinj; 1910-13. \ HATE OF INTEREST. "The average effective rate of interest that pur funds -earned is ,£5 Os. 3d. per cent, per annum. The. rate assumed' in our valuation is 35 per cent, per annum, so that we had a substantial contribution to our surplus from this source. "The third source is the only one whose contribution compares unfavourably with previous periods. "Thousands of our policy-holders-cx-actly 'how many it is impossible for mo to say—have felt compelled to offer iheir lives in defence of the Empire and its ideals of liberty and humanity. Un to the end of our last financial' year' 498 had been called upon for the full sacrifice, and our death claims were increased. Notwithstanding these unexpected, and, in a sense, unprovided for, claims the total is only 77 per cent, of the expectation.

"So much for the past. I think von Till admit, in view of our records that we have, reason to face the future with tho utmost confidence. The altogether unexpected events that we had to contend with did not find us unprepared Our margin of strength and reserves were more than sufficient, and Hie nature of our business is such that every addition to our obligations in (he form of a new policy adds still more to our strength, 'It blesseth him that gives and him that takes.' for while .bv admitting anew member to share in the ntlviml age's ol the accumulated funds the present members are conforn'ug a benefit, thev also gain ]>,- the additional contribution to the working nf the organisation for the common good." GREAT SUCCESS. Mr. W. Madden seconded the proposal, and congratulated the association upon its great success in very extraordinary circumstances It scorned that, notwithstandingall that had been experienced, the institution s prosperity was increis ins really by leaps and bounds, and there was really nothing but congratulation that he had to offer members in the circumstances.

The motion was carried unanimously. The Chairman announced that bonus certificates would be posted.