CITIZENS' LIFE ASSURANCE CO. LIMITED.

NZ Truth, Issue 145, 28 March 1908, Page 8

CITIZENS' LIFE ASSURANCE CO. LIMITED.

A GREAT BUSINESS

On a Sound Basis.

In presenting the twenty-first ann.ual report and balance-sheet to a ■ jubilant gathering of those interested" m the Citizens' Life Assurance Company, Limited, on the '28th ult., the chairman (Mr John J. Garvan) said they had reached "Cheir majority — or coming-.of-age— to the accompaniment of the finest of a long series' of successes, and with the certainty that no matter what the past has yielded, still greater triumphs await them. Such a preamble as' that did not fail to wreath the countenances of the shareholders and the policy-holders m smiles. Everybody is glad to witness the prosperity of an Australian institution, but when fat dividends and big, healthy-looking bonuses are making a bee-line for our pockets we feel like hooraydng for rf all we are worth, and passing innumerable votes of thanks to directors and officials, who have done such phenomenal biz. The head office of the coni'pany is at Citizens' Buildings the corner of Moore and Castlereaghstreets, Sydney, and that is where the joyful annual meeting was held. It was shown that . THE ACCUMULATED FUNDS • at December 31, 1907, amounted to £2,077,188 13s lOd. That's big money for an Australian office, but wait till you hear more. The increase for the year represents £274,579 4s Bd, which is something to be really proud of. It is a record. Moreover, it marks an epoch m life assurance business m the Commonwealth, as the Citizens' is the only Australian Life Office which has accumulated m 21 . years' funds amounting to two million ster- ' ling ! The money has been invested so well that it earns £4 Gs 8d per cent., a splendid result, when the nature of the securities are considered. Fifty-nine per cent, of the assets are now in-vested m Government stocks, municipal ■ loans and debentures, and ,loans to local governing bodies. The 'balance is on mortgages, freeholds, loans on the surrender value of policies, etc. There has been a GREAT ACCESSION OF NEW BUSINESS. In the ordinary branch the number of new policies was 7844, assuring the sum of £1,211,405, and producing a. new annual premium income of £41,---950 17s sd. This shows another big increase on' the preceding year, which is one of the best guarantees of the , growing popularity and stability of. the Citizens'. Without going outside of Australasia the new sums assured exceed those of 1906 by 16 per cent., ' or £170,701 m the aggregate. No new business was transacted outside Australasian 'boundaries. While the volume of insurance and income was growing the directors were, m inverse ratio, intent on REDUCING THE EXPENSE RATE to a minimum, jit is said riches is the parent of extravagance. That is' not the way the Citizens' manage. The expense rate of their ordinary branch, viz., 10 per cent, of the premium income, is 5.4 per cent, less than the rate for the previous year, which is another record. The rate m the industrial branch is likewise the lowest m Australasia. What do , the reduced ratio expenses to the total income of the company mean ? A : saving of £9000 for the year. In pursuance of the .careful conservative

policy adopted an amount of £12,---925 has been written of! securities. The valuation for the year 1906, approved by Actuary Ralph P. Hardy, showed the net liability of the ordinary branch to be £1,189,373, and, since the assets of the branch—according, to the audited balance-sheet ■—were £1,239,757, there was consequently a surplus of £50,3-18. "This • surplus," the actuary said, "satisfactory as it is, does not represent the full earning power of the company, which, m the past year, made substantial additions to its reserves, with the view of further protecting the permanent interests of the policy-holders. In ;view ofthe strong valuation reserves made, of the margins left upon the premiums, and of the considerable untouched source of future profit involved m the low estimated interest yield of only 2£ and 3 per cent., the appropriation, of £49,301 for immediate bonus distribution is justified, and the financial position of .the company^, m respect of both the present^ reserves and its expectation of future profits, entitles it to the full confidence of the Australian public." That was the state of affairs m 1906. Now let us see what Actuaries John Hindmarsh and John Kellv say, backed up by R. D. Miller, Fellow of the Faculty of Auctaries m Scotland. An .increase ? Why, of course. Increases all round are the order of the day. The following, they aver, shows THE PRESENT FINANCIAL' POSITION :— "The amount of the insurance fund, asTper balance-sheet, -is- £1,417,841 ; . the net liability, as per annexed schedule, is £1,357,594 ; leaving a net surplus of £60,247. The^gross surplus of the year is upwards of £81,---000. Diwring the year the sum of £12,925 was written off securities, and the valuation reserves have been further strengthened by over £8000, so that the year has provided £21,---000 towards the further enhancement of the company's already strong financial position."- Chairman John I J. Gaxvan told his gratified' shareholders and policy-holders *fchat it was v PROPOSED TO, DIVIDE £58,654 put of the £60,247 net surplus, and carry forward the balance of £1593. The amount divided will permit of the allocation of revisionary bonuses ranging up to ,£3 per cent, of the sum assured, according to the duration of the policy and the class of contract. "The reason fox our sue- ' cess, "concluded the chairman, "is becoming better understood. Shareholders deposit a capital as a guarantee to policy-holders that they will manage the business on certain approved lines. The policy-holder, therefore, m effeot dictates the lfind of management he wan/fes and the shareholders are bound to see that he gets it. In .consideration for c this undertaking,, the shareholders draw 20 per cent, of the profits. The remaining •80 per gent. . are paid to the policy-holders, and as they provide a bonus greater than 100 per cent, of any other office, it will We seen that this 20 per cent, paid to. shareholders is a very wise provision m the policy-holder's interest." Mr Garvan resumed his seat amid applause, and his motion for toe adoption of the GLOWING. REPORT AND PROSPEROUS BALANCE-SHEET was seconded by Sir William Lyne. The motion was carried with acclamation. Mr Henry Gullett proposed that the thanks of the meeting be tendered to the indoor staff, th t e field force, and medical examiners, whilst Sir W. P. Manning desired a hearty vote of thanks recorded to the managing director (Mr Garvan). Enthusiastic acclamation followed, and the meeting, closed.; PETITIONS TO SANCTION the amalgamation of the Mutual Life Association of Australasia with tne Citizens' have been made to the various Supreme Courts. Resolutions authorising .the amalgamation have been agreed to by extraordinary general meetings of tooth companies.