COLONIAL INSURANCE COMPANY.

Globe, Volume XXIV, Issue 2530, 18 May 1882, Page 3

COLONIAL INSURANCE COMPANY.

[FESSB ASSOCIATION TELEQRAII.J WELLINGTON, May 17. The annual meeting of the Colonial Insurance Company was held on Wednesday, when the balance-sheet (already telegraphed) was presented. Mr E. Johnson, in moving the adoption of the report, said—l now rise to propose the adoption of the report and balance-sheet. In doing so, I need hardly say I regret it is not my good fortune on this occasion to have to deal with a statement of account as acceptable to the shareholders as that I had the pleasure of submitting to them last year. The general result of the business done during the past twelve months is certainly far from favorable. Not only are your directors unable to recommend the payment of a dividend, but they are even compelled to make use of the earnings of former years to make good the very heavy losses sustained during that period, I am, however, glad to bo able to say that, beyond the disappoint ment caused by the nonpayment of a dividend and the discouragement arising from the diminution of the reserve fund, there is no ground for alarm. I know the business of the company is thoroughly sound and good, and moreover that it is steadily increa sing. Indeed, 1 may say our business relations are now on a more satisfactory fooling than they have ever before been, and I confidently look forward to the good results from the operations of the present year. The unfavorable results of the past year’s transactions have arisen from losses incurred in the ordinary course of business, and not from careless or reckless underwriting, but those losses have been caused to a very large extent by exceptional circumstances, such as from time to time will occur, and against which it is impossible to provide. I need scarcely remind you that the very essence of insurance business is "risk without certainty.” If there were "certainty” there would be no insurance, and the business is conducted upon principles based on the careful examination of average results extending over periods of long duration. With all the care, however, it is possible to exerci«e uniform success cannot be alwaye maintained. Periods of great losses will more or less frequently ocour, and it would be very unfair to judge of any company by its business transacted during one of these pe:iads only. For instance, the results of the past year will not give at all a fair view of the position of this company. At least we should for this purpose take into consideration the general result from'the business transacted duri g tho whole of the short period the company has been in existence, and from this wo see that up to the present time on a paid up capital of £50,000 we have succeeded in earning 35 per cent, in something leas than four years. Of this 20 per cent, has been paid in dividend, and 15 per cent, still remains as a reserve fund. When we con eider all the circumstances, how great hss been the competition,and how unusually heavy the losses, 1 do not think tho average yearly result, being over 8£ per cent., can be said to be otherwise than good. A compirison of the present balance-sheet with those of former years will bear out what I have said regarding the exceptional character of tho losses during the past twelve months and the present position of the company. The gross revenue of the company from premiums amounted —tho year ended March 31st, 1879, to £32,988 j in tho year ended Marc i 31st, 1880, to £61.780 ; in the year ended March 31st„ 1881, to £67,306; in the year ended March, 18S2, to £6B 486. With respect to this last item 1 may remark that whilst we have on the advice of the general manager very larg-ly restricted our business in some places outside this colony, and thereby very considerably diminished the amount of premium rcciived from those sources, our business within the colony has increased to such an extent that, the general result is, as you see, a substantial increase in the total premiums received. Had I not drawn attention to this an erroneous estimate would probably have been formed of the progress of our business. On tbs other hand our losses amounted in tho year ended March, 1879, to £9036 ; March 31st, 1860, to £21,464; March, 31st, 1881, to £23,251 ; March 31st, 1882, to £41,883 Again the working expenses for the year ended 31st March, 1879, were £9420 ; March 31st, 18 0, were £13,033; March 3lst, 1881. £17960; March 31st, 1882, £12,317. From these figures it will be seen that whilst there has been a steady annual increase in the revenue of the company from its commencement,! and a very considerable decrease in the working expenses of the past year, as compared with the two previous years, the losses have been almost double those of any previous period I think therefore I am quite justified in saying that the unfavorable results of the year just past have been caused by cxcep tional circumstances, such as we may fairly expect will not affect ns in the same extent

during the current year, and that in the afc- ; sense of such usual losses wo mar expect to 1 find the business in the future will be remunerative. I so* mora the adoption of the report and balance sheet, and shall bo happy to answer any question* the shareholders may desire to ask with reference thereto. The report and balance sheet ware adopted. Several shareholder* expressed satisfaction with the explanation which had been made, and although no dividend was declared thie year, they hoped that next year would show a more satisfactory result.