THE AUSTRALIAN MUTUAL PROVIDENT SOCIETY.

Globe, Volume XXIV, Issue 2506, 19 April 1882, Page 3

THE AUSTRALIAN MUTUAL PROVIDENT SOCIETY.

A country’s prosperity is tested by her mercantile institutions. Under such a test Now South Wales shows herself to be of almost fabulous growth. The one institution by which we, as a people, might stand with a certainty of the grandest results in a comparison of this kind, is the Australian Mutual Provident Society. In a double sense is the position of this society an indication of the greatest value. It tells of the wealth, and also of the provident character of the people. No one can look minutely into the affairs of this splendid institution without being struck by the fact that there must be a general prosperity here that is unknown in connexion with the people of any other part of the world. The principle of life assurance has virtually become, as it were, a part of the character of Australians. This means a general ability to spare the premiums, and a provision against unforeseen circumstances, which is in turn a provision against what might otherwise be an ever-inoreasing burden on the charitable institutions of the country. To tbe Australian Mutual Provident Society belongs the honor of fostering and developing in Australia the spirit of life assurance. This is an institution that has done a safe, steady, and honest business from the day of its foundation. The idea of mutuality has bean preserved with the greatest fidelity in all its wide-spreading operations. No gross idea has tarnished its transactions, because its success has meant the moral and material advancement of the community. Those once becoming members have been anxious that their friends should join them. This over increasing cause, with other aids, has given rapid development to tbe business. Its enormous investments, capable management, and extraordinary results have attracted wide attention. The institution has stood like a beacon light, to be seen far and near. Prom a small concern, for whose business requirements the upper rooms of a grocery shop sufficed, it has grown in thirty-three years to an affair with an accumulated fund of nearly four millions sterling, and an income of £850,000 per annum. It has attracted to its Board the most capable business men to bo found in our metropolis, and its meetings and elections have been second only in importance to those of a Parliamentary character. Looking at our population and tbe results, it is not surprising that its success should be denominated by the leading London journals a “ business phenomenon.” and as it eclipses similar institutions all over the world, Australians, and New South Welshmen in particular, have every reason to be prond of its existence. The business of the Australian Mutual Provident Society has, in fact, assumed such proportions as to take the chraoter of rational importance. Judged by its humble origin and the position it now occupies in the mercantile world of the Southern Hemisphere, it is almost impossible to predict its future or indicate the field of its operations. The problem will find its solution only in the great future of this country, because tbe success of the one is linked to the prosperity of the other. Some idea of the business of the Society may be obtained from these figures : The Australian Mutual Provident Society was established in 1849. In the first year forty-five policies were issued for £IOIOO, with an annual premium income of £361. For the first five years, 321 policies were issued for £119,015, and the income was £3877. The second five, 1103 policies for £562,980 and the new premium income £19,236. The third, 3374 policies for £1,579,209, and the new premium income £57,810. The fourth, 6440 policies for £2 667,246, and the new premium income £99,651. The fifth, 11,723 policies for £4,279.021, and the new premium income £158,327. The sixth, 23,353 policies for £8 362,594, an! the new premium income £286,775. At the end of the thirty years—that is in 1878 —the total policies issued were 46,314 for £17,570,065, and the premium income had risen to £625,679. The assurances void by death, &c., during the thirty years, amounted to £853.913, and the total decrease was £4,177,947, leaving a net increase of over £13,392,121. The business of tbe society, at latest returns, was continuing to show a proportionate increase. During 1880, 6551 policies were issued for £2,181,258, and the new premium income represented £74,666. During the year tbe payments on account of deaths amounted to £121,413, including £l4 438 bonus additions; and 18 endowment assurances had matured for £9277, including £2627 for bonus additions. The accumulated fund stood at £3,379,510, showing an increase of £445,713. The total policies issued up to December, 1880 (the returns for last year not yet being published), numbered 69,000, and the amount assured for £21,854,008. The annual income, at the end of 1881, may be stated at £BOO,OOO.

European financiers regarded as a "business phenomenon ” the fact that the society should be oble during tho thirty-two years, to pay all its claims by death, &0., out of interest receipts alone. But when the interest receipts during 1880 were found to exceed the combined payments for claims, commission and expenses of management by nearly £IO,COO, the result was stated as “ entirely unique in life assurance.” No society in England or any other part of the Old World can show such figures as these. Other facts struck the English critics. There were but one or two societies in England whose new assurances amounted to £1,000,000 sterling a year, while 90 per cent, of the companies looked upon such a thing as an unhoped for event. The Australian Mutual’s business for the year was £2.181,235 —an amount “ far exceeding that of any other life assurance office in the British dominions.” And it was considered extraordinary that the accumulated fund ahould be increased during the year by £445.713—equal to 87 per cent, of the premiums received. These figures completely lift the Australian Mutual to the premier position among the world’s life assurance companies.

Tho English critics regard tho terms under which policies are issued as liberal to a degree unparalleled. The principle of sustaining overdue policies out of surrender value, which has for many year* been adopted by the Society, is conoidered sound and liberal, and, in support, tho fact was recently quoted that the Society had kept in force 1804 policies which wore in arrear, paying £33,187 on account of their surrender value. The investment of the enormous accumulated fund at the command of the society has been done with great caution and with the most satisfactory results. Upwards of two millions of the funds are invested in loans on mortgage of real estate, and about half a million in loans on the society’s policies within tbe surrender value. Such objectionable items as loans on personal security find no place in the catalogue of its investments. With regard to tho expenses of management the Australian Mutual Provident stands first in economy of management in connection with those British institutions whose new business exceeded a million sterling of assurances, while, as compared with other Colonial institutions, the result is extraordinary. The ratio for the year 1880 of expenses of the Australian Mutual to the total receipts was 9 85, while in other Australian institutions it ranged from 24 to 39 per cent. The amount of profit realised and divided among tho members in 1879 was £504.382, at an average of £l6 33 to each policy holder. The bonus additions to tho Australian Mutual are something tangible. Here are two groups of illustrations, and they are a few of many hundreds of instances :

A person at twenty-eight years of ape insured for £2OO, and was in tho society for twenty-nine years and four months. The annual payment was £4 12s. The bonus amounted to £303. Thi* sum, if allowed to remain, would have extinguished the payments, giving the policy holder £l9B a» a reversionary sum, and an annuity of £S 14) 8d in addition. A person at tho age of forty-three insured for £IOOO, and was in the Society for twentyseven years nine months. Tho bonus amounted to £1495. Had this sum been silo wed to remain, the piyments for future premium would have been extinguished, and £4125 paid as a reversionary bonus, for an annuity of £lO6 secured altogether outside the amount for which the life was insured. When the Australian Mutual had been twenty-nine years in existence, a comparison was made of its business with the average of seventy-three of tho principal English offices. The Australian Mutual had an amount assured exceeding the average of EnpliOi offices by 232 per cent., and a premium income exceeding theirs by 268 per cent. A comparison now would show a yet more astounding contrast. Economy of management has been one of the distinguishing features of tho Australian Mutual, The expenditure is 13 per cent, of

the premium income, while the average cf the English office? is about, 14J-. The immediate advantages of assurance with the Australian Mutual bare been often referred to. Here are some actual instances. A policy for £IOOO was taken out br a member, and during twenty-five years, tbe bonus additions amounted to £1133. upwards of 113 per cent, of the original assurance. The bonus wore applied to the reduction of the premium, with the result that all future payments wore extinguished, and the holder of the policy scoured an annuity of £137 10s 43 for the remainder of bis life. All persons who entered the society at 55 years of age, and were assured 18 years and upwards, received bonuses sufficient to extinguish all payments, and give them annuities for the remainder of their lives, ranging from £3 18s 4d to £137 10s 43.

Member* who entered at 25 years of ago and were 25 years in the society received cash bonuses amounting to £330 12* each. The surplus dividend among members during the lest quinquennium, was £565,260. The bead office of the Society, Pitt street, in this city, is one of the finest edifices to be found in Australia. The total cost was about £55,000. The architect was Mr Mansfield, and the contractor the late Mr Hugh M'Master,—“ Sydney Exchange.”