The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, DECEMBER 9th., 1924.

Hokitika Guardian, 9 December 1924, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, DECEMBER 9th., 1924.

PROFITS OF INSURANCE. The moderation of the profits earned by British insurance companies was emphasised hv Mr CL W. Reynolds, general manager of the Guardian Assurance Company, in his presidential address before the Insurance Institute of London. He referred to a statement by the Governor of the London aiul Lancashire Company, Mr Pascoe Rutter, in which lie had summarised the actual experience of twenty of the very best insurance companies in Britain. JTp hfi'l taken ten typjen] years—-

namely the five years before the war. 1910-11 (a period subsequent to that devastating year of San Eramisco) and tlu* last five years, 1919-211, iiic-lnding lor 19211 the sixteen companies which had then reported. Thus there were avoided not only San Francisco, hut the abnormal years of the war, which constituted no true criterion. Totalling those ten years for all those companies representative of the best administration in Britain or any other enuntry, it was found that alter deducting all charges of every kind and taxation. there remained a net residue, available to the companies for their own use* and benefit, of actually lint more than 1.78 per cent. Mr Reynolds similarly examined the result of the past ten years. 191-1-211, of the grouped figures of the seventeen coin)-allies referred to, and found that the percentage of surplus to the premiums was 5 per cent. In those ten years, which included the apparently mest prosperous in the long history of insurance, Imre was however, a set-hack in the- values of securities comprising the companies' funds hv reason of their depreciation to tin unprecedented extent, and this had to he made good. It was the* fact that the rise ill the value of securities had since made* good this depreciation, but nevertheless there could Im* discerned tlie* necessity for insurance companies must carefully to husband their resources, and also that the* more favorable trading results in tin* past decennary were* still subject to modi Ilea I ion. Turning from this aspect. Mr Reynolds proceeded to examine tie* fundamental principle of insurance, lie said the companies owed to tie* community the maintenance of sound security, and it was ecpially the duty of the* .otnmiinriy that it should do its part nncl .ssist tie companies to maintain their strength. This the insuring public could undertake in full confidence that its interest in insurance was identical with that of the coin-panics. Very gradually, the general public has come to realise, as tin* result largely, of quite a number of failures within the last few years, that what offices sell is security. 1 bis ran only be ottered by tin* offices if there are ample* funds behind tiie policies. There are certainly degrees ol security there is first-class security, and there is second-class security. There may even be a third-class security, hut there comes a point where there is no real security at all. "I nbridlod" competition, Mr Reynolds said, was a menace io the whole undertaking of insurance and it led to disaster. British insurance companies penetrated to all parts of the earth, seeking a fair field but no favour, and in spite of much opposition and many penalties, the British offices, because of their sound financial position and high traditions, stood well in the estimation of merchants and traders throughout Hie world, who would pay for that absolute security which the British offices had to sell. British insurance was a national asset, upon which Great Britain received an adequate return.