“Brighter Prospects"

Sun (Auckland), Volume 1, Issue 112, 2 August 1927, Page 9

“Brighter Prospects"

N.Z. Insurance Company Optimistic Successful Year Concluded WITH the English strike now settled and trade prospects both in New Zealand and the East appearing’ to be brightening, the Board looks forward with confidence to the year just entered upon,” said Mr. Henry Horton, Chairman of Directors of the New Zealand Insurance Company, at the annual meeting to-day.

rpHE balance sheet of the company, which was unanimously adopted, showed that after paying a dividend of Is 9d a share for the year (less interim dividend of lOd a share paid in February), absorbing £65,750, a credit balance of £131,243 16s 4d was carried forward. The surplus on the year’s operations was shown to be £90,152 11s 2d, and income from interest and rents, £125,358 Os 7d.

In moving the adoption of the annual report, as published in THE SUM of July 26, the chairman referred to the loss sustained during the year by the death of Sir Arthur Myers, who was for many years a director of the company. ADVERSE CONDITIONS Referring to the year just concluded Mr. Horton said that the period had not been without its trials and difficulties. Events of a disturbing nature had been met with at different points in their widespread world business The great strike in England, the disturbed conditions in the East, and more particularly in China, and coming nearer home, the less buoyant state of affairs in our own Dominion, were some of the adverse factors that the company had to contend with. The underwriting profit for the year, he said, was £90,152, as against £ 80,158 last year, a very gratifying increase of £IO,OOO. In connection with the profit made, a feature had been the reduction in what had been earned in New Zealand, where conditions had been very unsatisfactory. The good results of this year were a tribute to the energy and foresight of the pioneers of the company in building up a world-wide business which enabled profits earned abroad to he brought into the country to the general advantage. From the figures submitted it would be seen that these premiums had advanced by £55,412, i.e., from £1,066,012 to £1,121,424. When it was remembered, said the chairman, that last year the New York branch (and their income there was not inconsiderable) was closed, and that at most points competition, accompanied by reducing rates was keener than ever, that progress must be deemed satisfactory. Published figures indicated that companies at New York were still generally experiencing difficult times and the wisdom of their decision to retire from that territory was amply confirmed. Notwithstanding the increase achieved in premium income, expenses had dropped from £355,380 (33.34 per cent.) in 1926 to £335,557 (30.19 per cent.), or by £16,793 (3.15 per cent.). That saving had come about mainly by closure of the New York branch. FIRE WASTE Last year, said Mr. Horton, the chairman spoke of the prevalence of

fires. He considered it a regrettable fact that there had been a continuance, particularly in dwelling houses in the country districts of the North Island. That destruction of property was an economic loss to the country and the fact that property was insured did not alter the position.

The fire waste in New Zealand was higher per head of population than any other country in the world, except iu the United States of America, and while the preponderance of wooden buildings was a factor, faulty construction of heating arrangements no doubt contributed largely to that undesirable state of affairs. Investments had continued to have the' close attention of the directors and this year the sum of £125,358 had been provided from this source, after payment of all taxes and charges properly apportioned thereto. The re turn from invested funds was now 5.35 per cent., as against 5.19 per cent, earned last year. c c CAPITALISATION OF RESERVES In the past, whenever reserves have grown to a figure beyond requirements it had been the practice to transfer some portion to capital. That gratifying position had again arisen, and it was proposed that the sum o. £150,000 be transferred from general reserves to capital account. To effect that shareholders would be asked to assent to a call being made of 3s a share, and to meet that, the declaration of a dividend of 2s a share, the whole of which would be applied to the payment of the call. . If that proposal was agreed to the paid-up capital would be £1,200,000 and the reserve fund, after the transfer of £75,000, would stand at £400,000. One pound shares will be paid up to 16s leaving 4s liability. Given a continuance of satisfactory years it was the intention of the board to carry out its policy of gradually extinguishing the liabilty remaining on shares. A reference to the liability side of the balance sheet would disclose that appropriation for unascertained losses was now £207,641, or some £12,441 less than the amount shown last year. The reserve for sundry creditors and unexpired reserve was also reduced by £59.936, from £205,633 to £145,697. Both these adjustments were largely due. to the liquidation of liability in connection with the New York branch. Mr. Horton concluded with an appreciative reference to the excellent service again rendered by the staff, to which, he said, was largely due the successful results obtained. It was resolved that the sum of £150,000 be transferred from reserves to capital, thereby reducing the uncalled capital by 2s a share. The retiring directors, Messrs. H. Horton, Charles Rhodes and A. S. Bankart, were unanimously re-elected.