NATIONAL MUTUAL LIFE ASSOCIATION.

Hauraki Plains Gazette, Volume XXXIV, Issue 4553, 20 April 1923, Page 4

NATIONAL MUTUAL LIFE ASSOCIATION.

SEVENTEENTH ACTUARIAL INVESTIGATION.

An extraordinary general meeting of policy holders in the National Mutual Life Association of Australasia, Ltd., was held at Melbourne on March 21, for the purpose of receiving the report by the actuary on the seventeenth investigation. The ieport covered the three years’ period ,t.o 30tA September last. The chairman, Mr A. Newell, in presenting Ithe report to policy-holders, said: “The chairman of these meetings has always had a pleasant duty to perform in presenting the report of the association’s business. Almost invariaoly it has been a record of progress and development ; sometimes the rate of progress has been checked by conditions which w’ere beyond our control,, but we have never gone back. The report, which I will presently ask you to adopt, shows that during the last three years we have surpassed all past records. At our annual meeting we have had particulars of each year’s transactions, but the significance and result of. those transactions could not be known accurately until the value of the association’s obligations under the policies that have been issued was ascertained. We have now before us the results of the valuation as at 30tii September last, and a summary of the whole of the business since the valuation, which w'as made ait, 30th September. 1919. With your permission, I will comment briefly on the principal items in the report. Our income during the three years amounted to £7,582,768, of which £5,289,523 was for premiums on policies and £2/293,245 was for interest and fees. The total was £1,774,487 greater than the income of the previous period. The interest is equal to a return of £5 5s 7d per cent, per annum of our total funds during the period,, and this rate, calculated on the amount of the assurance fund at 30th September, 1922, represents an annual income of more than £295,000’ in excess of the amount which it was assumed in ths valuation the funds will yield. The amount of interest received, you will notice, is nearly twice as much as the amount that was required to pay claims under policies. The payments to members under their policies amounted to £2,713,643, or £73,118 less than the amount paid from 1916-19, and the amount added to the assurance fund wms £4,063,290, which is £1,666,494 more than the corresponding item shown in the 1919 report. Tiie income of the three years is equal to the total income of the association* during the .first 28-years of its history, and the amount added to the funds is equal to the accumulations of the first 35 years. The new policies issued during the period amounted to £17,012,338. This is £3,550,000 more than we have issued In arv similar period. The amount spent in obtaining this business represents more than half of the total expenses. This is owing to the method which is generallj adopted of paying the w|)ole cost of new business during the first year of a policy. It lias often been asked how much nqw business can a life office transact with advantage to its members. No definite answer can be given to this question, but it is certain (hat a proportion of new' busi ness carefully selected and obtained at a' reasonable cost is . essential to maintaining the healthy condition of an office.

MORTALITY EXPERIENCE. “There is a reference in the actuary’s report to the mortality experience of the three years to which I would rail your special attention. After five years of war and pestilence we have had three years free from any disturbing influence, and the result is shown in the amount of claims on our Consolidated Revenue account. From an amount that, was uncomfortably close to the expectation in 1919 we have dropped to an amount that is 35 per cent, below, so that with a much larger amount at risk the claims are £429,585 less than they were three years ago

“ The law _of mortality works very surely, and although we may have fluctuations from years to year, and under exceptional conditions, as we have seen the fluctuations may be serious, in the long run the law will prevail. We, therefore, cannot hope for a continuance of the remarkably favourable experience of the last three years. The result of cur opera-f tions is given in a condensed form -m page fifteen of the report. The valuation balance-sheet shows that while the assurance fund of 30th September, 1922, amounted to £16,587,659, the net value of the liabilities at that date was £14,882,160, so tha-‘ there was a surplus of £1,70'5,498. This may ue stated in another way. During the three years the assurance fund had been increased by £4,063,290, and the liability has, during the same period, increased by £2,357,791. The Actuary recommends that £250,000 1 of this surplus should be reserved for what is called, for want of a better form, ‘suspended mortality.’ The reason for this is obvious from what I have said about pur recent experienca, and the direotors had no hesitation in adopting the recommendation. The amount to be divided amongst the policyholders—£l,4ss,49B—is £666,011 more than the amount that was divided ! three years ago, and it is sufficient to I provide reversionary bonus or addi- i tions to the sums assured under policies of over £2,500,000. “We cannot, claim thart, this very satisfactory position is the result of the last three years’ work. We are reaping the result of the conservative policy that has been followed in the management of the affairs of the association tor many years.

“A perusal of the report and schedules will enable members to appreciate the matters that I have touched very lightly; any elaboration of them on this occasion would be out of placeBut there.is a significant fact disclosed by the information on page nineteen. You will see that, the total of the premiums received on policies that arejiow in force is less than the amount z of the assurance fund ; in other words, we have now in hand

more than the total premiums that have been paid by the present policyholders. Since the association was established we have paid to policyholders £14,999,335. PURCHASE OF EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES. “This is the first opportunity of informing the members direct of the completion of an important transaction by the association. Since our last annual meeting we have arranged to reinsure the whole of the Australasian business of the Equitable Life Assurance Society of the United States; Announcements have appeared in the. press which contain all the important facts, and I can only add that the transaction is a satisfactory one for the members of the association. “The bonus certificates showing the reversionary bonus additions to thcii policies will be issued to members on Thursday next week. BONUSES TO BE ALLOTTED ANNUALLY IN FUTURE. “Hitherto the association has issued bonus certificates only at the end of each triennial period; it is intended henceforth to issue to members after the close of each year of a tyien nium certificate showing the inter-, mediate bonuses allotted to policies for the year.” The report was adopted. The district office of the National Mutual Life Asosciation is at Hamilton, and the District Manager is FGibson Parsonson.—Advt.