INSURING PROFITS.

Hokitika Guardian, 24 February 1928, Page 3

INSURING PROFITS.

The In test feature of insurance was disclosed in the arrangements recently announced for the merger of the interests of Vickers and Armstrongs, states an English Exchange. In order to insure to the new company a minimum profit for earlier years it is stated that, a well known insurance company has guaranteed that during the first five years it will pay a sum not exceeding £20!\0!)0 each year if the profit of the company (hies not exceed a specified figure. 'I his. however. is supplemented hy a lurther condition that the amount so paid during those five years shall he recoverable with interest during the next fifteen years, hy the comnany al,locating 40 per cent of its profits in excess of the minimum figure. Ihe insurance company appears to be confident that during those fifteen years the profits will exceed the minimum, as otherwise it will he the loser. In view of the unforeseen events that may occur during the next twenty years, the insurance company’s risk seems rather a sporting one. 'I he rate of premium has not been disclosed.