GOVERNMENT LIFE INSURANCE.

New Zealand Times, Volume XXXIV, Issue 5770, 26 September 1879, Page 3

GOVERNMENT LIFE INSURANCE.

We have been favored with a copy of the tenth annual report of the Government Insurance Commissioner, prepared for presentation to the General Assembly. The report states that notwithstanding the financial and commercial depression which has been experienced in the year reported on, the new business of the office, which had shown a falling away during the first six months of the year, has in the whole period advanced even somewhat beyond the amount which marked the new business of the preceding and, in the commerce of the colony, much more prosperous year. The new proposals received during the year numbered in all 2707 for the gross sum of £971,461. Of these, 690 were either declined or were not completed. New policies were issued to the number of 2071, representing au assured amount of £656,283. The total new premiums amount to £25,323 9s. 9d. Death claims were made during the year under 82 life policies, amounting to £30,100. These claims arose through the death of 75 persons. This shows a larger mortality than has occurred iu the experience of the department in any former year. At the same time it should be'noted that the amount paid per claim is more than 10 per cent, under the average of preceding years, while the number of policies has very largely increased. Numerous as these deaths have been they are still considerably below the rate of mortality on which the insurance tables are calculated. One remarkable circumstance in relation to the claims which have arisen is the fact that, of the total number of deaths of assured persons (73 in all), uo fewer than 17, or 22f per cent., were caused by sudden and unexpected accidents. Seven of these casualties were deaths by drowning, and five arose from accidents connected with horses. The sums which became payable by the department to the representatives of the victims of these accidents amounted to £6IOO, or fully a fifth of the whole amount payable for death claims in the period reported on. The provision made by the persons assured has in many of these cases saved their representatives from the pressure of poverty. The policies issued for the nine and a half years during which the department has been in operation number 12,896, assuring the sum of £1,533,733. Of these policies 2582, have been discontinued by lapse, surrender, death of the assured, or otherwise ; and there were at the close of the financial year 10,311 existing policies, assuring £3,741,997. Appended to the report are the accounts for the year under the review. The year’s income, derived from all sources (including £l5O 12s. sd. from the industrial branch), was £133,072 14s. 10d., showing an increase of £21,231 13s. lid. over that of the previous year. The accumulated funds of the department, as at 30th June last, amounted to £372,651 11s. 5d., living an increase during the period of £79,592 10s. Id. In view of the trade depression already referred to, this increase cannot be deemed other than satisfactory, as showin" the continued progress of the department and the spread of a prudent thrift among the inhabitants of the colony. The ratio that the expenses of management for the year (including commission) bear to the premium income, shows a reduction of nearly one and a half per cent, as compared with that of the previous year. From the industrial branch the policies continue to be transferred to the ordinary branch, as occasion serves. A payment of £IOO was made during the year, arising from the death of one policy-holder. The Commissioner, Mr. Luckie, proceeds to say that “ in one of his annual reports a former Commissioner (the Hon. Mr. Gisborne), after referring to the fact that the profits arising from the transactions of the department were thenceforward to be di Tided periodically among policy-holders, remarked that ‘ the State’is satisfied with the recompense which it derives from the increase of provident habits and the decrease of destitution among its people, while the insurer receives the more immediate advantage.’ Speaking of the success of the system, ho viewed it as ‘ a social object of inestimable worth,’ and one which should be ‘ carefully cherished,’ inasmuch as 1 the whole community collectively, and members of it individually, are directly interested in that success, and directly share iu the gain.’ ’’ It has been my object to extend the sphere of these advantages, and arrangements have been made by which further facilities for assurance have been placed before persons employed on the railways of the colony and otherwise, many of whom have promptly availed themselves of the opportunities thus offered for providin'” for the future welfare of their dependents’ and also for securing endowments for themselves in their later years.

I entertain strong hopes that the steady progress of life assurance—a progress greatly fostered and maintained by the feeling of security given to the assured by the inviolable guarantee of the Legislature of the colonywill produce social advantages further-reaching in their influence than even the beneficial nrewth of that provident forethought of which life assurance is both a cause and an effect. Of late years it has been steadily inculcated in the public mind among all classes, and is becoming now almost universally recognised, that life° assurance is a duty incumbent on every man who now has, or is likely to have, persona dependent upon him. When it is generally understood that among the conditions of successful entry into an assurance institution that of a temperate life is a prominent qualification, a further ■feocial reform will receive an important stimulating impetus. When it is known that a person of intemperate habits, or having a in that unwholesome direction, will seriously imperil, and in most cases actually destroy, the chalices of his acceptance by an assurance office, there will in time, I believe, be induced the practice of a higher self-control, springing

from a growing self-respect and from thi sacred claim* of d ceestio affection. Allusion has 1 si. t., t Act of Par-

liament by tli". pro l . - ■'!,* which the profits arising from to-- busincs <■: tin l department shall be divided qninqu- in.WiJy among th-, policy-holders. The fir A division of proot. will, after an actnana! inv-'-tigation, tak: place on the close of the financial year nov current : that is to say, after :30th June, 1831, in accordance v.a'h the statutory enacmcnt. The attrac'ivenc-s of such divisim is not unnatural, in view of the charn which Generally attaches to voat may le termed speculative vain o IVith regard to tie profits yielded by the Government insuramc department there is an element of certainty that should not he overlooked. From the me meat of the entrance of a policy holder, he :s practically the recipient of an aunu:d bonus ii the shape of an immediate saving. This arises from the very low rate of premiums, which i: this respect are unequalled nr any British o colonial institution of the kind, with one -siniflj exception, a Scottish office. In order to il’us trate this immediate saving, the subjoins! figures, referring to Australasian institutions are copied from an elaborate and instrncfiv table compiled by Mr. Morrice A. Black, th accomplished actuary of the leading Australia: assurance society. The tab'e gives example of the rates of premium charged by diflereu offices at age 35 for an assurance of £IOO fe the whole term of life by even annual pje minins. The “ net premium ” is £1 IDs. 5d being that for a healthy male according to thtable of the Institute of Actuaries. What i termed the “ loading,” as levied by the variou--offices, and to which special allusion is now made, is set forth in the table as giver below :—•

The loading, per sc, in all the six foreign cases enumerated ranges from 56 to 105 per cent, above the very moderate loading which marks the tables of this department. Hence, tlie average policyholder in the New Zealand Government Insurance Office receives an immediate advantage, as compared with what is offered by other "Australasian institutions,extending to so much as Bs. 2d. on the premium payable for every £IOO insured. In other words, between the two most prominent examples enumerated in the foregoing table, there is a difference in the rates of premium to the extent of fully 17 per cent., that difference in the case referred to being in excess of the rates charged by the Government department. The advantage thus arising to the policy-holder in this office continues yearly during the whole term of the policy, and is practically equivalent to an annual bonus, for the money, instead of being paid away, is retained in tlie pocket of the assured person. This, together with the comfortable security afforded by the Government guarantee, and the fact of th# profits being secured by law to the policy-holder, will largely account for the rapid growth and present position of the' Government; Insurance Department.

Name of Institution. g, Loading contributed. |3£| £ s. d. ,2 s. d. Australian Mutual Provident Society 2 15 4 0 15 11 287 Mutual of Victoria .. 2 14 i) 0 15 4 28-2 National Mutual (Victoria) 2 13 3 0 13 10 20 0 Mutual Life Association of Australia. 2 12 7 0 U 2 25'0 Colonial Mutual of Victoria 2 11 0 0 12 4 2;rs Australian Widows' Fund.. 2 11 0 } 12 1 235 New Zealand Government.. 2 7 2 0 7 9 15-5