NATIONAL MUTUAL LIFE ASSOCIATION.

Shannon News, 13 April 1923, Page 4

NATIONAL MUTUAL LIFE ASSOCIATION.

SEVENTEENTH ACTURIAL INVESTIGATION.

An extraordinary general meeting of policy holders in the National Mutual Life Association of Australasia, Ltd.j was hold at Melbourne on 21st March, for the purpose of receiving the report by the actuary on the seventeenth investigation. The report covered the three years' period to 30 th. September; last. The chairman, Mr A. Newell, in presenting the report to policyholders, said: —‘ ‘The chairman of these meet-; ings lias always had a pleasant duty to perform in presenting the report of the association's business. Almost invariably it has been a record of pi ogress and development; sometimes the rate of progress has been checked by conditions which were 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 wo have surpassed all past re-, cords. At our annual meeting wo 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 30th September last, and. a summary of the whole of the business since the valuation which; I was made at 3Ulh 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 the 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 was £4,063,290, Avhich is £1,666,494 more than the corresponding item showm in the 1919 report. The 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 £17,012,335. This is £3,550,000 more than wc have issued in any 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 .generally adopted of paying the whole cost of new business during the first year of a policy.. It has often been asked how much now business can a life office transact with advantage to its members. No definite answer can be g’iven to this question, but it is certain that a proportion of new business carefully selected andobtained at a reasonable cost is essential to maintaining the healthy condition of an office.

MORTALITY EXI*ERIENOE. “There is a reference iu the actuary's report to" the mortality experience of the three years to which 1 would call 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.

“Tho law of mortality works very surely, and although we may have fluctuations from year 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 tlio last three years. The result of our operations is given in. a condensed form on page fifteen of the report. The valuation balance-sheet shows that while the assurance fund at 30th September, 1922, amounted to £16,-; 587,659, the net value of the liabilities at that date was £14,882,160, so that; there was a surplus of £1,705,498. This! may be 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 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 our recent experience, and the directors had no hesitation in adopting the recommendation. The amount to be divided amongst the policy-holders —£1,455,498—is £666.011 more than the amount that was divided three years ago, and it is sufficient to provide reversionary bonus or additions to the sums assured under policies of over £2,500,000.

“Wc cannot claim that this very satisfactory position is the .result of the last three years' work. Wo are reaping the result of the conservative policy that has been followed in tho management of the affairs of the association for many years.

“A perusal of the report and schedules will enablo members to appreciate tho matters that I have touched very lightly; any elaboration of them on thi3 occasion would be out of place. But there is a significant fact disclosed by the information on page nineteen. You will see that the total of tho premiums received on policies that are now in force is less than the amount, of the assurance fund; in other w r ords s we have now in hand more than the total premiums that have been paid by the present policyholders. Sraee 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. Sinco our last annual meeting wo have arranged to reinsure the whole of the Australasian business of tho 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 tho association. . “The bonus certificates showing tho reversionary bonus additions to their policies will be issued to members on Thursday, this 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 triennium certificates showing the intermediate bonuses allotted to policies for the year. n Tho report was adopted. The District Agent for Manawatu of the National Mutual Life Association is W. Grey.