THE A.M.P. SOCIETY.

Wairarapa Age, Volume XXXII, Issue 10427, 19 September 1911, Page 6

THE A.M.P. SOCIETY.

AN EMINENT ACTUARY'S RE- J PORT. } In a progress' report furnished/ to ' the Board of Directors of the Aus- | tiralian Mutual Provident Society, Ma- George King, F.1.A.,F.F.A., the eminent actuary, of 'London, who recently visited Sydney to report on tttve business of itihe Society, said:— Tine methods l pursued in the various 'departments of the business' have been examined, and l l find. 1 that th© system is excellent, and eo planned as to involve Daily a miiiEnium amount of work. I have paid • more particular attention to .tflie valuation methods, and) find that the work is carried out with 'tifoe'greatest precision, and with ; checks iso efficient that no error of any consequence could escape discovery, lihe actuarial formulas used hi itilie valuation of rtJhe various kinds of plolicies ihave bean examined, and I agree iwfctfh itihem all; and I 'have checked their application to individual cases and 1 , everything has 'been found fto ibe accurate. As a test of the (general (accuracy of till© valuation, I have also re-valued by an. approximate summary process the ordinary whole Mfe business, which 1 constitutes almost exactly one-half of tfie total liability of the Society, and tlie result was an estimate of liability of £12,908,375, while the liability jdisclosed' by the official valuation was £12,917,303. The complete accuracy of' the official valuation is thus absolutely confirmed. The examiinaition dnto the valuation methods' of the Society may lead me to make a few suggestions with tlie view to further curtailing the work, and these will be- dealt with in my more detailed report later on. More particularly, in the method of distribution of surplus there is a vast amount of labour involved, which is costly, and which causes delay hi the declaration of itlhe. annual bonus. lam in (hopes that a method may ibe devised hy which a great deal of thisi may be avoided', while at the same time tine relative amount of bonus' assignedi to the various policies will not be .materially altered, even w3ien the method* is first applied. If this can he caroled out, then, after the first application of 1 tfke "new, (method, everything would I work with great facility and very j smoothly, and produce bonuses very like those wibiich at present give .so much satisfaction to the policy holders.

The .bonuses distributed 'by the Society are very large, and they are fully earned. My investigations also show that as .between policy holders of the different classes ■f/hey are distributed in an equitaible way. But a possible prospective fall in this rate of interest .realised has to be faced, and *he valuation basis is therefore 'being gradually changed from 3£ per cent, to 8 per cent. This i® a •wise proceeding, and it will he well to hasten the final result as far ais that can he done without materially affecting the rate of .bonus.

I have 'but little personal expeiri:-' ence of .kvestmients in Australasia, and fit would be presumption on my part to expire&s amy opinion upon them. I may, however, be permitted to say that -thle system iby Avhich the iwesffcraents <are mlade, amid continuously supervised, by the Directors at tlie .head office and other branches-, is adimJiraible, and calculated, to .maintain the maximum of security, and I feel snre that the members of the Society may have 'absolute confidence that .their, imsmense funds are well administered and iso invested as. to yield safely the utmost return in interest that economic circumstances permit.