STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1918.

Appendix to the Journals of the House of Representatives, 1919 Session I, H-06

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1919. NEW ZEALAND.

STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1918.

Presented to both Houses of the General Assembly pursuant to the Provisions of the State. Fire Insurance Act, 1908.

State Fire Insurance Office, Wellington, 30th June, 1919. I have the honour to present the fourteenth Annual Report of the State Fire Insurance Office together with Revenue Account and Balance-sheet for the year ended 31st December, 1918. The Revenue Account shows that the year 1918 has been the most successful yet experienced by the Office. The income shows the same steady progress that has characterized former years. Th's progress, I think, must be considered satisfactory, especially in view of the very serious staff difficulties existing owing to the large proportion of staff on active service. These difficulties are a little less acute only now. Many of the officers who have returned are, unfortunately, still suffering from impaired health due to active service, and it will be some considerable time before the Office will gain the full value of their services. lam pleased to be able to say that I find an excellent spirit prevailing among those officers who have returned. They are as keenly anxious to take up their civil duties and to give of their best as they were to " do their bit " in defence of the Empire. After deducting a-sum of £13,792 14s. 6d. for income-tax the surplus for the year amounted to £31,374 15s. 9d. This sum is allocated as follows : Unearned Premium Reserve, £1,902 Bs. 4d. ; Investment Fluctuation Reserve, £1,000 ; Leaving a net profit of £28,472 7s. 5d.. compared with a net profit of £22,601 9s. 3d. for 1917. The net income amounted to £99,458 19s. 4d., showing an increase of £8,078 6s. 4d. for the year. The total sum assured for the year amounted to £24,000,000—an increase of £2,000,000 over 1917. The assets of the Office at the close of the year amounted to £244,927, as compared with £208,220 at the close of 1917. investments total £199,480, as against £1.52,608 for 1917. Of the total investment £100,000 is in war loans. The loss ratio was 33-2 per cent., an increase of 1-2 per cent, over 1917. The Office is fortunate in again being able to show a loss ratio far below the average for the Dominion. Following are the particulars of profits, net income, losses, working-expenses, and funds for 1918, as compared with tho year 1917 - Profits. —The net surplus (inclusive of income-tax charges), after appropriating a further sum of £1,902 Bs. 4d. to Unearned Premiums Reserve, and a further sum of £1,000 to Investment Fluctuation Reserve, amounted to £42,265 Is. lid., as compared with £36,525 Bs. 9d. for 1917. The total accumulated profits at the close of 1918 amounted to £172,988 195., as against £144,516 lis. 7d. for 1917. Net Income. —The net income from all sources amounted to £99,458 19s. 4d., as against £91,380 13s, for 1917, showing an increase of £8,078 6s. 4d. The net premium income was £90,077 7s. lid., as against £85,321 7s. for 1917, an increase of £4,756 os. lid. Losses.— The net losses were £29 871 13s. 4d , as compared with £27 302 4s. lid. for 1917, the ratio to premium income being 33-2 per cent, and 32 per cent, respectively. Working-expenses. —The ratio of working-expenses to premium income, exclusive of income-tax, for 1917 was 27-5 per cent., and 27T per cent, for 1918.

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Accumulated Funds.— -The funds at close of 1918 amounted to £214,019 18s. 2d., and for 1917 £182,645 2s. 5d., showing the very substantial increase of £31,374 15s. 9d The following summary of the first and second septennial periods in the life of the Office gives a clear and concise indication of the relative progress and success of the two periods : — First Seven Second Seven Years. Years. £ £ Total net income .. .. .. ..209,095 535,122 Total net losses .. .. .. .. .. 109.320 187,744 Total profits .. .. .. .. .. 12,437 160,551* " Averages per annum :- Net income .. .. .. .. ..29,871 76,446 Net losses.. .. .. .. .. .. 1.5,617 26,821 Profits .. .. .. .. .. .. 1,777 22,936* Ratio of working-expenses to premiums (per cent.) .. 33-20 27-29f Ratio of losses to premiums (per cent.) .. .. 53-19 ■ 37-35 War-risk and Marine Insurance. It may be here stated that the Office during the war period administered the War Risk Insurance Act, 1914, and also acted for the imperial War Risks Office. War-risk insurances, mostly in small amounts, to a total of £] ,436,445 were, effected on behalf of shippers, at rates considerably below those, at which cover could have been obtained locally, and the operations of the State Fire Office no doubt also exercised a restraining influence on the rates charged by the private insurance offices to shippers who did not directly avail themselves of this Office's activities. The premiums under the New Zealand war-risk scheme amounted «to £1,199 7s. 9d., and there were no losses. Both the premiums received on behalf of the Imperial War Risks Office and those received in connection with the local scheme were lodged direct to the credit of the Public Account ; therefore none of the figures appear in the State Fire accounts. In addition to operating the war-risk insurance schemes, the Office during the period of the war also acted in an advisory capacity regarding marine insurance ; and on behalf of the Board of Trade, the Imperial Supplies Department, and the Munitions and Supplies Department effected marine insurances on the best available terms to a total of £1,284,167 on wheat, scheelite, foodstuffs, and military supplies of every description. C. .R. C. RobiesOiN, General Manager. Revenue Account of the Statu Fire Insurance Office for the Year ended 31st December, 1918. £ s. d. £ s. d. Premiums after deduction of reinsurances 1)0,077 711 Losses by lire (after deduction of reinsurOther receipts—lnterest, commission, and ances) .. .. .. .. 29,871 13 4 rent .. .. .. .. 0,381 II 5 Appropriated to reserve for unearned premiums (in addition to £34,128 10s. lOd. already reserved) .. .. .. 1,902 8 4 Investments Fluctuation Reserve, Fund . . 1,000 0 0 Government taxes .. .. .. 13,792140 Commission .. .. .. 7,010 13 9 Salaries .. . . . . . . 8,889 10 10 War bonus to staff on salaries under £315 055 0 1 Contributions to Fire Boards under the Fire Brigades Act, 1908 .. .. 1,818 18 5 Expenses of management— £ s. d. Travelling-expenses .. 859 17 0 Printing, stationery, and advertising .. ~ 1,181 11 5 Rent, .. .. 1,157 2 0 Exchange .. . . 24 4 0 Postages, telegrams, cablegrams, and sundry charges .. .. 1,565 10 0 Office buildings and equipment written off .. 651 7 3 5,439 12 8 Amount of fire-insurance funds at end of year .. .. .. .. 28,472 7 5 £99,458 19 4 £99,458 19 4 3rd March, 1919. C. R. C. Robikson, General Manager. Examined and found correct. —R. J. Collins, Controller and Auditor-General.

* After deducting £27,710 income-tax. f Exclusive of income-tax.

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Balance-sheet op the State Fire Insurance Office on the 31st December, 1918. Liabilities. Assets. £ s. d. £ s. d. £ s. d. Government war bonds and stock .. 100,000 0 0 Capital authorized by the Government debentures and Consols .. 68,196 6 6 State Fire Insurance Municipal Corporation loans .. .. 500 0 0 Act, 1908 .. .. 100,000 0 0 Mortgages on property .. .. 2,850 0 0 Less not raised .. 100,000 0 0 Freehold land and buildings .". .. 27,933 13 5 — Nil. Outstanding premiums .. .. 7,172 5 2 Reserve Fund .. .. ..130,516 11 7 Interest accrued but not due .. .. 1,469 14 9 Reserve for bonus to policyholders .. 8,000 0 0 Rent accrued but not due .. .. 79 12 g Investment Fluctuation Reserve Fund . . 5,000 0 0 Cash in Bank of New ZeaRescrvo for unearned premiums .. 36,030 19 2 land at Wellington, or £ s. d. Premiums and other deposits .. .. 486 7 I in transit to Wellington 36,436 14 3 Outstanding fire losses .. .. 2,390 0 0 Imprest Account balances — Government taxes .. .. .. 13,792 14 6 £ s. d. Other amounts owing by the Office — Head Office 16 2 1 Reinsurance premiums £ s. d. Auckland.. 63 12 10 due .. .. 12,329 5 7 Christchurch 87 18 0 Commission .. 1,374 7 7 Dunedin .. 89 12 1 Rent .. .. 40 2 11 Palmerston Printing, stationery, North .. 30 6 5 and advertising .. 17 4 8 New PlyPostages and sundry mouth .. 2 10 charges .. .. 477 18 8 . 289 12 5 14,238 19 5 — 36,726 6 8 Fire - insurance funds, as per Revenue Account .. .. .. .. 28,472 7 5 £244,927 19 2 £244,927 19 2 3rd March, 1919. C. R. C. Robieson, General Manager. Examined and found correct. —R. J. Collins, Controller and Auditor-General.

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