ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1892.

Appendix to the Journals of the House of Representatives, 1893 Session I, H-20

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1893. NEW ZEALAND.

ANNUAL REPORT OF THE GOVERNMENT INSURANCE COMMISSIONER FOR THE YEAR ENDED 31st DECEMBER, 1892.

Presented to both Houses of the General Assembly pursuant to the provisions of the Acts relating to Government Life Insurance.

Government Insurance Office, Wellington, Bth July, 1893. I have the honour to submit herewith the revenue account, balance-sheet, and tables of business of the department for the year 1892. New Business. —During the year 3,481 proposals for a total amount of £"870,437 were received. Of the whole of the proposals submitted, 407 were deferred or declined. Of every 100 proposals received, 79 were accepted at ordinary rates, 9 were loaded— i.e., accepted with an extra premium, and 12 were deferred or declined. Of every 100 policies completed, 92 were at ordinary rates, and 8 with an extra premium or the equivalent contingent debt. The number of policies issued was 2,634, °f which the following are the particulars :—

In the General Section, the policies issued were 2,130, assuring £532,745, and in the Temperance Section, 504, assuring The Temperance section has been especially successful during the year, the new business transacted in this section being nearly three times that-of the immediately preceding year. Premiums received. —The total new premiums received amounted to £20,688, being slightly in excess of the previous year. The renewal premiums received amounted to £212,437, being an increase over 1891 of £9,585. The gross premiums received, £"241,965, exceeded those of 1891 by £"7,469. Interest. —The interest earned during the year amounted to £"100,639, being £"4,260 in excess of the previous year. Total Revenue. —The total revenue from all sources showed an increase of £"11,722, and amounted to £"342,617. Claims under Policies. —The claims preferred for deaths of assured persons amounted (after deduction of contingent debts) to £"84,366, while those for endowment assurances and endowments matured amounted to £"23,449. Expenses of Management. —'The expenses of management (including commission £"12,696, property-tax £"3,724, and land-tax £"2,137) amounted to £"52,707, and show a decrease both in actual amount and in relation to the premium income. In the latter case the reduction is 1 per cent. During the last three years the total reduction in the ratio of expenditure to premium income has been very nearly 4 per cent. Accumulated Funis. —The funds have increased by £"132,501, and at the end of the year amounted to £"1,980,297. I—H. 20.

No. Sum Assured. kVhole-life and term assurances Endowment assurances Children's endowments \nnuity policies (the amount payable to the annuitants being at the rate of £"906 per annum) I »3°4 1,274 37 263,696 3,874 19 2,634 £"642,10.

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General Remarks. —While there has been a slight falling off in the amount of new business, fewer policies have run off the books, the improvement being no less than £"72,579 in the amount assured. There has been a great improvement in the lapses, the decrease in that item being partly due to the application of the bonus last declared. The decrease in the policies void more than compensates for the slight falling off in the new business, and the net increase in the policies in force is therefore greater than for the previous year. A heavy lapse rate is undoubtedly a prominent characteristic of colonial life insurance, and is probably caused to a considerable extent by social conditions beyond the control of the offices themselves. However, this unpleasant feature is common to all colonial life offices, but it will be apparent from a consideration of the following facts that the constant efforts of this department to minimise the evil have not been without good results:— (1.) The increase in the renewal premium income of the department has been steady and progressive, as will be seen from the following table :—

(2.) The total amount of insurance retained by the department after twenty-three years of existence is over eight millions, being equal to an average of £350,000 of sum assured for each year's operations. This very substantial average net increase is more than a whole year's new business of many first-class British offices. (3.) The amount of insurance voided by lapse and surrender has absolutely decreased year by year, although the total insurance in force (from which these terminations arise, and with which they must be contrasted) has constantly increased in volume. The following table will show that the proportion which these terminations bear to the total business in force has fallen from 8 per cent, in 1887 to 3-6 per cent, in 1892, a decrease of over 50 per cent. : —

As may be gathered from the accounts and returns presented herewith, the policy now being pursued by the department is that of aiming for a healthy increase of business each year, and, at the same time, reducing the expenditure to such a point as will lessen as much as possible the cost of insurance to each policyholder. This policy is, in my opinion, the only sound one to pursue in the management of a life-insurance institution ; and this view appears to prevail more than formerly in life-insurance circles throughout the world. JOSEPHUS H. EICHAEDSON, Commissioner.

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Year. Renewal Premiums. Increase. £ 174. l6 3 181,225 187,736 195,213 202,852 212,437 £ 1887 1888 1889 1890 1891 1892 7,062 6,511 7,477 7.639 9:585

Year. Total Amount of Insurance in Force at end of Year. Amount of Insurance Terminated by Lapse and Surrender during the Year. Percentage of Lapses and Surrenders to Amount in Force. 1887 1888 1889 1890 1891 1892 £ 6,832,000 7,076,000 7,326,000 7,544,000 7,783,000 8,036,000 £ 544,000 466,000 454,000 400,000 371,000 289,000 8-o per cent 6-6 6-2 5'3 4-8 „ 3-6 „ \

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Eevenue Account of the Goveenment Life Insueance Depaetment for the Year ended 31st December, 1892. £ s. d. £ s. d. £ s. d. Amount of Funds at 31st December, Death claims under policies, 1891 .. .. .. .. 1,847,796 10 7 Assurance, including bonus Renewal premiums — Assurance, An- additions .. .. .. 84,366 2 0 nuity, and Endowment .. .. 212,436 10 5 Endowment Assurances maNew premiums on 2,615 policies, assuring tured, including bonus ad£642,104, and yielding an annual reve- ditions .. .. .. 22,108 12 7 nue of £19,443 16s. 2d. (including in- Endowments matured .. .. 1,341 0 9 stalments of first year's premium fall- Premiums returned on Ening due in the year) .. .. 18,392 18 2 dowments .. .. .. 49 9 3 Single premiums—Assurance and En- Bonuses surrendered for cash .. 20,137 5 6 dowment .. .. .. .. 2,295 5 9 Annuities .. .. .. 6,253 12 8 Consideration for annuities .. .. 8,840 14 3 Surrenders .. .. .. 21,150 16 3 Interest .. ~ .. .. 100,638 14 11 Loans released by surrender .. 2,001 9 0 Fees .. .. .. .. 12 10 2 Commission, new.. .. .. 11,173 12 7 „ renewal .. .. 1,522 16 5 Property-tax .. .. .. 3,723 19 4 Land-tax .. .. .. 2,137 6 1 Expenses of management,— Salaries—Head Office ..10,534 11 3 „ Branch Offices and Agents.. 4,937 6 7 Extra clerical assistance 1,288 13 6 Medical fees and expenses 3,849 14 4 Travelling-expenses .. 896 4 7 Advertising .. .. 842 5 11 Printing and stationery .. 1,395 10 1 Rent .. .. .. 1,575 2 6 Postage .. .. 1,563 17 1 Telegrams .. .. 419 9 4 Exchange .. .. 283 1 5 Office furniture depreciation 436 6 5 General expenses .. 2,002 13 11 Quinquennial expenses .. 3,084 10 4 Compensation for loss of office .. .. 1,040 1 5 ■ 34,149 8 8 Amount of funds at 31st December, 1892 . .1,980,297 13 2 £2,190,413 4 3 £2,190,413 4 3

Balance-sheet of the Goveenment Life Insurance Depaetment on 31st December, 1892. Liabilities. £ s. a. Assets. £ s. d. Total Assurance, Annuity, and Endow- Loans on policies .. .. .. 333,734 9 7 ment Funds (as per Revenue Account) 1,980,297 13 2 Government securities, — £ a. d. Claims admitted (proofs not yet completed) 20,288 10 0 Consolidated stock .. 681,993 0 0 Annuities .. .. .. .. 27 19 2 Treasury bills .. 140,000 0 0 Commission .. .. .. .. 1,870 15 3 Debentures issued under Medical fees .. .. .. .. 884 2 0 " The Government Premium deposits .. .. .. 2,466 4 8 Loans to Local Bodies Valuation-fee aeposits .. .. .. 1 11 6 Act, 1886 .. .. 10,000 0 0 Fire-insurance ana mortgage moneys in Railway aebentures suspense .. .. .. .. 150 0 0 (guaranteed by GoTontine Savings Funds .. .. 3,245 3 7 vernment) .. 79,850 0 0 Reserve for possible depreciation in free- 911,843 0 0 hold ana mortgage securities .. .. 25,000 0 0 Municipal Corporation debentures .. 105,572 0 0 County securities .. .. .. 1,000 0 0 Otago University debentures .. .. 15,000 0 0 Harbour Board debentures .. .. 19,000 0 0 River Board debentures .. .. 935 0 0 Landed and house property .. .. 101,367 1 2 Office furniture (Head Office and Agencies).. .. .. .. 3,454 18 11 Mortgages on property .. .. 425,647 13 2 Properties acquired by foreclosure .. 37,684 5 8 Overdue premiums on poli- £ s. d. cies in force.. .. 6,421 18 2 Outstanding premiums due in December, 1892 24,862 1 7 ■ ■ 31,283 19 9 Interest outstanding .. 2,171 411 Interest accrued but not due .. .. 22,533 14 6 24,704 19 5 Agents'balances ... .. .. 2,090 5 7 Sundry accounts owing .. .. 1,292 2 4 Cash on current account .. .. 19,622 3 9 £2,034,231 19 4 £2,034,231 19 4 Government Insurance Office, 16th April, 1893. Josephus H. Bichaedson, Commissioner. W. B. Hudson, Secretary. Audited and found correct. James Edwaed EitzGeeald, Controller and Auditor-General.

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Statement of Business

POLICIES ISSUED AND DISCON-

PARTICULARS OF POLICIES DISCON-

PROGRESS OF BUSINESS OF THE GOVERNMENT INSURANCE DEPART-

Note.—The Ordinary Premium is the premium at the true age; the

Wellington, ifih April, 1893.

ASSUR, NCES. liole-lifi a and Wm Assun nces. Endowment Assurances. YEAR 1892. No. Sum Assured. Eeversionary 13oiius. Annual P: ■emium. No. Sum Eever- Annual Pri Assured. "/ - - uonus. | 0rdinary amium. Ordinary. Extra. Extra. Policies in force at 31sfc Dec, 1891 .. £ £ £ s. d. £ s. d. £ £ £ s. d. £ s. d. 17,646 5,293,118 440,590 135,909 14 11 4,053 10 9 10,977 2,459,999 167,479 88,750 3 0 982 10 5 New Business, 1892 .. 1,304 374,534 -(18) 9,362 0 10 179 7 6 1,274 263,696 18 9,698 9 1 45 6 0 Total .. 18,950 5,067,652 440,572 1,027 16 5 145,271 15 9 4,232 18 3 12,251 2,723,695 167,497, 98,448 12 1 Policies discontinued during 1892 869 249,593 45,404 7,137 0 1 272 1 5 591 134,806 18,068 5,315 18 8 183 18 8 Total Policies in' force at 31st ■ Dec, 1892 843 17 9 18,081 5,418,059 395,168 138,134 15 8 3,960 16 10 ill, 660 2,588,889 1149,429 93,132 13 5

How Discontinued. 5,543 1,918 18 7 By Death Maturity Surrender Surren. of Bonus Lapse Expiry of Policy.. Expiry of Prem. .. Miscellaneous 188 '238 60,635 63^058 3,635 1,697 11 0 33,865 2,361 2,754 19 7 33 15 3 698 15 6 33 0 2 90 15 1 6119 9 59 75 177 15,900 18,901 45,005 1,375 2,871 2,670 10,717 435 556 14 6 1,160 14 0 1,655 0 4 7 2 0 13 1 3 20 2 7 '440 3 123*500 2,400 63 16 6 '280 55,000 1,901 6 9 41 12 6 Gil 10 42 18 3 42' 3 1 102"o 4 869 249,593 45,404 7,137 0 1 272 1 5 591 134,806 18,068 5,315 18 8 183 18 8

Total issued Total void 32,353 14,272 9,830,335 612,586 259,931 5 7 4,412,276 217,4181121,796 9 11 5,418,059395,168138,134 15 8 9,908 11 9 5,947 14 11 21,339 9,679 4,968,414 227,767 2,379,525 78,338 180,119 3 0 86,986 9 7 2,398 1 11 1,554 4 2 Total in force .. 18,081 3,900 16 101 11,660 2,588,889149,429 98,182 13 5 843 17 9

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at end of Tear 1892.

TINUED DURING THE YEAR 1892.

TINUED DURING THE YEAR 1892.

MENT SINCE DATE OF ESTABLISHMENT TO 31ST DECEMBER, 1892.

JOSEPHUS H. RICHARDSON, Commissioner. MORRIS FOX, Actuary.

Approximate Cost of Paper— Preparation, nil; printing (1,575 copies), £5 10s.

By Authority: Samuel Costall, Government Printer, Wellington.—lB93.

Price 6d.~\ 2—H. 20.

ENI V SIMP] lOWMEt iSTMEN LE NTS, INITS, &C. ANNUI IES. TOTAL. No. Sum Assured. Annual Premium. N Annual Premium Annuities. No. Sum Assured. Reversionary Bonus. Annual P: 'emium. Annuities. Ordinary. Extra. £ £ s. d. £ s. d. £ s. d. £ 7,782,734 £ 608,069 £ 8. d. £ s. d. £ a. a. 482 29,617 1,248 12 6 121 10 16 0 6,347 0 8 29,226 225,919 6 5 5,036 1 2 6,347 0 8 37 3,874 145 16 7 19 12 16 2 906 7 3 2,634 642,104 19,219 2 8 224 13 6 906 7 3 519 33,491 i;394 9 1 140 23 12 2 7,253 7 11 31,860 8,424,838 608,069 245,138 9 1 5,26o 14 8 7,253 7 11 80 4,219 187 8 0 4 204 3 8 i,544 388,618 63,472 12,640 6 9 456 o 1 204 3 8 439 29,272 1,207 1 1 136, 23 12 2| 7,049 4 3 30,316 8,036,220 544,597 232,498 2 i\ 4,804 14 7 7,049 4 8

4 "22 41 i',3il\ 1,483 61 7 0 57 17 4 204 3 8 251 97 456 7 6 >535 20,242 109,546 6,918 2,871 6,305 44,582 2,796 2,475 13 i 1,222 I O 3,410 8 8 103 17 1 13 1 3 82 2 4 204 3 8 "l7 1,395 68 3 8 737 3 179,895 2,400 4,724 10 o 33 15 3 698 15 6 75 3 3 105 9 o 6 11 10 144 18 7 80 4,219 187 8 0 4 1,54 456 0 1 204 3 8 204 3 8 388,618 63 472 12,640 6 9

1,778 1,339 88,657 4,311 14 0 59,385 3,104 12 11 191 55 1137 7 5 113 15 3 9,568 15 1 2,519 10 10 55,66114,887,406 25,345 6,851,186 840,353 295,756 444,499 10 o 212,001 7 8 12,306 13 8 7,501 19 1 9,568 15 1 2,519 10 10 439 29,272 1,207 1 1 136 23 12 2 7,049 -4 3. 30,316, 8,036,220 544,597 232,498 2 4 4,804 14 7 7,049 4 3 Extra Reduction of Premium by Bonus, ;c. 4,804 14 7 293 19 4 .£237,596 16 3 extra, the additional premium imposed for any reason whatsoever.