THE MUTUAL LIFE & CITIZENS’ ASSURANCE COMPANY, LTD.

Dominion, Volume 33, Issue 183, 30 April 1940, Page 10

THE MUTUAL LIFE & CITIZENS’ ASSURANCE COMPANY, LTD.

Annual Meeting -The fifty-third tmuiial meeting of tbe Company was held in Sydney on April IS, HUD. The cliairnian (Sir John Peden), in moving tbe adoption of tbe report and balance sheet, said : — This is the first meeting since the death of Mr. James Ashton on August 6 last. 1 begin ibis morning with an expression of tbe deep sorrow with which we miss the spell of bis presence. It would be difficult to pay an adequate tribute to his eminent service iu public life and in private capacities. In his long and intimate association with th'-' company we were proud to claim him as a leader and a friend. A member of the board for 25 years, and for the last .12 years our chairman, he conserved and promoted the interests of policy-holders, staff, and members of the company with outstanding ability and far-seeing wisdom. Dr. Arthur .Mills, for many years our chief medical officer, died in harness ou the J Olli instant, his own cheery self to the last moment of his life. With profound regret tbe board has recorded its deep sense of the loss sustained by tbe company in tbe death of one whose knowledge, judgment and devotion to duty have been of inestimable value. It has offered sincere sympathy to Mrs. Mills and the members of bis family.

Mr. A. G. Copeland, a member of the staff for more than 50 years, and general secretary since Mr. Bloomfield s death, retired from that office'last year. Fortunately we have been able to retain his services as a director. -Mr. M. C. Alder, who has been with tbe company for 36 years, has been appointed general secretary. During 1939, its fifty-third year, the company again made gratifying progress. For the fourth successive year the new business was a record. comparison with the figures of 1938, tbe new business in the ordinary branch reached £8.388.171 as against £8,233,135. and in the industrial branch £4,596,793 as against £4,440,654. With a record in each branch, the total amount of the new business for both was £12,984,964, as against £12,673,789. These result.' were obtained at a low rate of expense under economical management. They were obtained, too, in a year of recurring crises, culminating in war, and during a period in which there was a general tendency for new business in life assurance to decrease. Tbe company has now more than 688,000 policies in force. With bonuses they assure £89,000,000. In estimating our actuarial liabilities we use the most stringent bases of valuation in Australia. Interest to be earned in future is assumed to be only 2} per cent, in the ordinary branch, and only 2i per cent, in the industrial branch. These assumptions allow for a wide margin of security in each branch. In 1939 the rates of interest which were realized after deduction of taxes from the interest income were £4/10/10 per cent, in the ordinary branch, and £4 12/2 per cent, in the industrial branch. Assurance funds increased during the year by £1,023,069. They now stand at £26,696,944. In addition we hold general reserves amounting to £600,000. and taxation reserves of £279,300. As further security for policy-holders there is the capital of £1,000,000. The total assets of the company amount to £30,173,335. Nearly 70 per cent, consists of public securities or carry a Government guarantee. The aggregate book values of the assets are considerably below the actual market values. The total income for the year exceeded £4,500,000. More than £1,300,000 of the income represents interest on investments. The interest outstanding at the end of the year amounted only to £7387. Of tliis sum we have brought into account only amounts paid during the first few weeks of the current year. During the year our holdings of Government and municipal securities were substantially enlarged. Our advances to co-operative building societies, which operate under Government guarantee, increased .by nearly £900,000 to £2,098,414. Through these societies we have financed or arranged to finance the erection or the purchase of about 3500 homes. This is more than a matter of investment. It is a form of social betterment with which we are glad to be associated. Claims paid during the year amounted to £1,942,941. Since its inception the company has paid to policyholders and their beneficiaries £38,855,548. Our mortality experience continues to be highly satisfactory, and is evidence of the careful attention which is paid to the selection of risks. In the with-profit section of tbe industrial brunch, the section whicn comprises the great bulk of our industrial branch business, and includes all policies issued in Australia and New Zealand since 1925, the policyholders are entitled to at least 80 per cent, of the profits. Substantial bonuses are allotted annually in this section. In the other section of the industrial branch, which consists of nonparticipating policies, we have made substantial voluntary grants in the past, and have in fact paid approximately £200,000 in excess of our contractual obligations. Recently we have made further provision for concessions to non-participating whole-life policyholders in Australia and New Zealand.

Shortly after the war began we decided that in the case of policyholders serving in the Army or Navy the com pany would waive any clause on existing policies by which the death risk was restricted while the assured was on active service. We have also decided that in policies issued before the war the company will waive aviation restrictions in respect of life assurance benefits, where death ,is caused by any accident or injury while the assured is engaged on aviation duty in or in connexion with war service. In accordance with universal practice war conditions form part of all new policies, as the normal premiums do not provide for the extra hazards of war. True financial strength in a life office, and proper security for policyholders, can be maintained only by a careful husbanding of resources and by ample provision for exceptional strains. The M.L.C. has maintained its great strength throughout a long period. Today it is stronger tilian ever. We must, however, anticipate an increase in death claims and in taxation, while the interest obtainable on investments will probably fall. In view of these eventualities, and in the interests of policyholders we have decided to add !o our reserves by setting aside £225,000 from tlie surplus of the ordinary branch, and £6-1,500 from Hie surplus of the industrial branch. At. Hie same time it lias been possible Io allot substantial reversionary bonuses to ]>olicyl>olders. Life assurance funds are an aggregation of savings of individual policyholders. The total amount, of the funds held in Australia by life offices is now well in excess of £200.000,000. They fall bin little short of the total Savings Bank deposits. These facts are significant not only of the value which is being placed upon life insurance by all sections of the community, but also of the importance Of the life

offices in the financial structure of the nation. At the time of the Great War the M.L.O. subscribed millions to war and peace loans, and gave a lead which was of great help to the Commonwealth. To the' first loan in the present war we subscribed one-fiftieth of the total issue. We are helping in other directions. We shall continue to subscribe and to help throughout the war. Mr. F. Leverrier, K.C., in seconding the chairman’s motion for the adoption of the report, said: — We are keeping open the positions held by members of the office and field staffs who have enlisted or who have been called up for military duties. In the case of the office staff we are paying the difference between the office and military pay in each case, and arc making generous provision in similar circumstances for the men in the field. We sihall follow the same procedure throughout the war. Work on the Wellington, New Zealand, building progressed steadily last year, and save for some minor finishings the structure is now complete. Tenants are already in occupancy, and the company will conduct its New Zealand business from those headquarters from this month. , The Wellington building is akin in design to those erected by the company at. Sydney and Melbourne. It forms an outstanding addition Io the architecture of the Dominion capital city. The handsome appearance and convenient internal arrangement are highly commended, and make it a credit to tlie company. A vote of thanks to the directors, trustees ami staff was proposed by Mr. 13. P. ITollingdal and carried by acclamation. A vote of thanks lo the ehairman, proposed by Sir Henry Manning, terminated the proceedings.—P.B.A..