STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1926.

Appendix to the Journals of the House of Representatives, 1927 Session I, H-06

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1927, NEW ZEALAND.

STATE FIRE INSURANCE OFFICE. ANNUAL REPORT OF THE GENERAL MANAGER FOR THE YEAR ENDED 31st DECEMBER, 1926.

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

State Fire Insurance Office, Wellington, 28th April, 1927. I have the. honour to submit the twenty-second annual report of the State Fire Insurance Office for the year ended 31st December, 1926, together with Revenue Account and Balance-sheet. The following comparative figures for the last three years show the very satisfactory progress which has been made :— 1924. 1925. 1926. Income — £ £ £ Net premiums .. .. .. .. .. .. 165,070 176,664 197,471 Other receipts, including rents and interest .. .. 25,229 30,753 36,074 Outgo — Rebate .. .. .. .. .. .. 22,005 17,405 24,496 Claims.. .. .. .. .. .. .. 60,817 56,997 79,062 Ratio of working-expenses to premiums (per cent.) .. .. 29-48 28-14 28-03 £ £ £ Carried to Reinsurance Reserve Fund . . . . .. .. 5,000 5,000 5,000 Office premises written off . . . . . . . . 4,000 4,000 4,000 Carried to Bonus Rebate Reserve .. .. .. .. .. 23,500 1,500 Surplus for the year after paying rebate .. .. .. 31,131 35,917 40,737 Reserves and funds at 31st December .. .. .. .. 499,006 568,061 623,622 Total assets at 31st December .. .. .. .. 530,283 604,096 661,519 Income. —The amount of increase in premiums for the year has been exceeded only on one previous occasion, and the increase in the total revenue is easily a record. Rebate. —The rebate to policyholders cost £24,496, the largest sum rebated in any one year. The rate of rebate was 12J per cent., 2J per cent, more than for 1925. Since the rebate system was instituted in 1923 policyholders have been granted rebates as follows : — £ Year ended 31st December, 1923 .. .. .. .. .. 10,996 1924 .. .. .. .. .. 22,005 1925 .. .. .. .. .. 17,405 1926 .. .. .. .. .. 24,496 £74,902 The effect which the declaration of the State Fire rebates has had on fire-insurance premiums generally is thus referred to in the Government Statistician's latest report: " With regard to the rebate itself, it is interesting to note the extent to which the insuring public has benefited by this concession since its inception on the Ist August, 1923. During that year the amount so granted was £141,794, followed by £271,440 in 1924 and £231,172 in 1925, making a total of £644,406 to the end of 1925. The decrease during 1925 is, of course, due to the reduction in the rate." Claims. —The claims incurred during the year amounted to £79,062, and represented a sharp increase of 7-78 per cent, over the claim ratio for the previous year. Many claims are due to defective workmanship in buildings, particularly in the country, where supervision is lax or entirely absent; but a far greater number arises from carelessness or indifference, factors more apparent when there is financial stress than when conditions are prosperous. In this connection there is need to again point out that fire waste is an irreparable national loss, that fire insurance merely distributes the loss in the form of a tax on the community, and that the carelessness or indifference causing fire waste not only has to be paid for in insurance rates, but has a far-reaching effect from an economic point of view on such questions as housing and the deviation of capital for mere replacement purposes, which is required for the development of the country. Working-expenses. —A slight reduction in the ratio to premiums has been effected. This would have been greater had it not been that classifications have in many parts of the Dominion been substantially lowered and premiums correspondingly reduced. Fire Board levies cost the Office 2-68 per cent, of the premium income, as against 2-40 per cent, in 1925. Income-tax absorbed £15,073, or 7-63 per cent., as compared with £10,242, or 5-80 per cent., in 1925. It may be mentioned that according to the latest published figures the Office has in recent years paid far more in incometax on fire income than any other office. I desire once again to express appreciation of the excellent work performed by the Managers and staff. J. H. Jerkam, General Manager.

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Revenue Account op the State Fire Insurance Office for the Year ended 31st December, 1926. £ s. d. £ s. d. Premiums after deduction of reinsurances 197,471 911 Bonus rebate to policyholders .. .. 24,496 19 7 Other receipts—lnterest, commission, and Losses by fire (after deduction of reinsurrent .. .. .. .. 36,074 5 9 ances) .. .. .. .. 79,062 16 10 Appropriated to reserve for unearned premiums (in addition to £70,665 17s. lOd. already reserved) .. .. .. 8,322 14 2 Government taxes .. .. .. 15,073 1 3 Commission .. .. .. 9,923 1 9 Salaries .. .. .. .. 25,418 17 7 Contribution to Public Service Superannuation Fund .. .. .. 546 11 3 Contributions to Fire Boards under the Fire Brigades Act, 1908 .. .. 5,304 0 0 Expenses of management— £ s. d. Travelling-expenses .. 2,191 13 5 Printing, stationery, and advertising.. .. 2,021 16 6 Rent .. .. 2,033 1 0 Exchange . . .. 35 16 0 Postages, telegrams, cablegrams, and sundry charges .. 2,987 14 4 9,270 1 3 Office equipment .. .. .. 1,520 18 10 Office premises—Depreciation .. .. 3,368 15 1 182,307 17 7 Reinsurance Reserve Fund .. .. 5,000 0 0 Office premises—Written off .. .. 4,000 0 0 Bonus Rebate Reserve .. .. 1,500 0 0 Amount of fire-insurance funds at end of year .. .. .. .. 40,737 18 1 £233,545 15 8 £233,545 15 8 Balance-sheet of the State Fire Insurance Office on the 31st December, 1926. Liabilities. Assets. £ s. d. £ s. d. £ s. d. Capital authorized by the Government war-loan securities .. 148,146 7 0 State Fire Insurance Other Government securities .. .. 88,550 0 0 Act, 1908 .. 100,000 0 0 Local authority securities .. .. 66,245 0 0 Less not raised .. 100,000 0 0 Fixed deposits and at short call .. 65,000 0 0 Nil. Land and buildings .. .. .. 222,076 7 3 Reserve Fund .. .. .. 448,895 15 4 Outstanding premiums .. .. 8,657 3 7 Investments Fluctuation Reserve Fund.. 10,000 0 0 Interest accrued but not due .. .. 5,059 18 7 Reserve for unearned premiums .. 78,988 12 0 Rent accrued or due .. .. .. 316 16 2 Bonus Rebate Reserve .. .. 25,000 0 0 Sundry debtors .. .. .. 9 2 0 Reinsurance Reserve Fund .. 20,000 0 0 Cash in Bank of New ZeaPremiums and other deposits .. .. 961 8 6 land at Wellington, or in £ s. d. Outstanding fire losses .. .. 6,709 0 0 transit to Wellington 57,205 3 3 Government taxes .. .. .. 15,070 14 9 Imprest Account Sundry creditors .. .. .. 1,386 2 5 balances— £ s. d. Other amounts owing by the Office— Head Office 5 7 6 Reinsurance premiums £ s. d. Auckland .. 2 5 4 due .. .. 11,072 18 6 Hamilton .. 20 14 2 Commission .. .. 1,717 8 8 N.Plymouth 75 0 1 Rent .. .. 57 0 9 Palmerston N. 68 3 8 Printing, stationery, and Napier .. 513 3 advertising .. 34 010 Nelson .. 018 5 Postages and sundry Christchurch 56 0 9 charges .. .. 888 1 11 Timaru .. 6 19 3 13,769 10 8 Dunedin ..079 Fire-insurance funds, as per Revenue Invercargill 11 13 9 Account .. .. .. 40,737 18 1 253 3 11 57,458 7 2 £661,519 1 9 £661,519 1 9 11th April, 1927. J. H. Jerram, General Manager. C. B. Redward, Accountant. I hereby certify that the Revenue Account and Balance-sheet have been duly examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby. —G. F. C. Campbell, Controller and Auditor-General.

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