ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1929.

Appendix to the Journals of the House of Representatives, 1930 Session I, H-06a

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1930. NEW ZF A LAND

ACCIDENT INSURANCE BRANCH OF THE STATE FIRE INSURANCE OFFICE (ANNUAL REPORT ON THE) FOR THE YEAR ENDED 31st DECEMBER, 1929.

Presented to both Houses of the General Assembly pursuant to Section 22 of the Government Accident Insurance Act, 1908.

State Fire Insurance Office, Wellington, 24th June, 1930. I have the honour to submit the twenty-ninth annual report of the Government Accident Insurance Office for the year ended 31st. December, 1929, together with the Revenue Account and Balance-sheet. The following comparison with the previous two years shows the progress made : — 1927. 1928. 1929. Income — £ £ £ Premiums from all classes of accident insurance .. .. 65,560 71,731 81,353 Interest .. .. .. .. .. .. 10,895 12,368 13,342 Outgo — Claims.. .. .. .. .. .. .. 38,972 43,807 49,853 Per Cent. Per Cent. Per Cent. Ratio of claims to premium income .. .. .. 59-44 61-07 61-28 £ £ £ Free-year bonus on personal accident policies .. .. 154 145 166 Working-expenses (exclusive of income-tax) .. .. 15,394 16,482 18,340 Ratio of working-expenses (exclusive of income-tax) to premium Per Cent. Per Cent. Per Cent, income .. .. .. .. .. .. 23-49 22-98 22-55 £ £ £ Income-tax .. .. .. .. .. .. 2,430 3,294 3,939 Carried to reserve for unearned premiums .. .. .. 3,248 2,776 4,330 Per Cent. Per Cent. Per Cent. Ratio of underwriting surplus to premium income .. . . 11-88 11-88 10-65 £ £ £ Carried to Investment Fluctuation Reserve .. .. .. .. 3,000 Surplus .. 16,255 17,592 15,066 Reserves and funds as at 31st December .. .. .. 225,539 245,909 268,306 It will be noticed from the above figures that a greater increase in premium income was secured than in the previous year, and that the expense ratio was reduced to 22-55 per cent., the lowest recorded in the history of the Office. In view of the general depreciation in securities, the Investment Fluctuation Reserve has been increased by £3,000. Without this transfer the surplus for the year would have been slightly larger than for 1928. Workers' Compensation Insurance. —Employers with a record of claims above the average for their class are finding it increasingly difficult to secure a continuance of insurance cover with insurance companies, and during the year the State Accident Office has been called upon to assist a number of such employers who otherwise would have been unprotected. The effect of this has been to raise the Department's loss ratio on its compensation business to an average of 73-35 per cent., which is above the claim average (71 per cent.) on which premiums are based.

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Motor-vehicles Insurance (Third-party Risks) Act, 1928. —The outstanding feature of the year from an insurance point of view has been the operation of this Act, which came into force on the Ist June, 1929. The Act is an interesting advance oil any legislation of the kind in any part of the world, a*nd is without precedent in its abrogation of many of the conditions usual to an insurance policy. Compulsory acceptance by each insurance office of all risks for which it is nominated is also novel to insurance practice. Administrative details were worked out by representatives of the insurance companies, the Post Office, and the State Accident Office, and the insurance on over 200,000 vehicles under the scheme has been satisfactorily effected. Simplicity of procedure and the entire elimination of competitive costs were aimed at, with a view to giving the public the benefit of cover at the lowest possible administrative cost. The premiums fixed by Government were in all cases lower than were charged for more restricted cover at the time of the passing of the Act. Experience of the cost over a period of at least two years will enable equitable adjustments to be made ; in the meantime premiums are experimental. Motorists thus have a direct financial interest in eliminating the negligent and careless driver, and, when an accident unfortunately does occur, in preventing" exploitation. Exploitation is probably the greatest danger to which any system of compulsory third-party insurance is exposed. j. On account of the lack of any previous experience of insurance similar to that provided by the Act, and the uncertainty of the incidence of claims, the insurance companies and the State Accident Office have established a " pool," by means of which the risk is shared and experience exchanged. The information collected through the operation of the pool has already proved most valuable. J. H. Jerram, General Manager.

Revenue Account of the Accident Beanch of the State Fire Insurance Oefice for the Year ended 31st December, 1929. £ s. d. £ s. d. Premiums after deduction of reinsurances .. 81,353 10 10 Free-year bonus on personal accident policies .. 166 7 4 £ s. d. Claims .. .. .. .. 49,853 1 5 Interest .. .. .. 13,342 13 10 Commission.. .. .. .. .. 5,490 8 8 Less land and income tax .. 3,939 0 2 Salaries .. .. .. .. .. 10,393 15 0 9,403 13 8 Contribution to Public Service Superannuation ."Fund .. .. .. .. .. 140 0 0 Expenses of management .. .. .. 2,316 16 1 Further appropriation to reserve for unearned premiums .. .. .. . . 4,330 0 9 Further appropriation to Investments Fluctuation Reserve .. .. . . .. .. 3,000 0 0 Amount of accident funds, 31st December, 1929 .. 15,066 15 3 £90,757 4 6 £90,757 4 6 Balance-sheet of the Accident Branch of the State Fire Insurance Office as on the 31st December, 1929. Liabilities. £ s. d. Assets. £ s. d. Accident funds, as per Revenue Account .. 15,066 15 3 Government war-loan securities .. .. 100,500 0 0 Outstanding accident claims .. .. .. 19,255 0 0 Other Government securities . . .. .. 18,000 0 0 Government taxes .. .. .. .. 3,939 0 2 Local-authority securities .. .. .. 93,867 511 Commission.. .. .. .. .. 459 10 4 Rural Advances bonds .. .. .. 14,425 0 0 Premium and other deposits .. .. .. 127 17 4 Mortgages on property .. .. .. 4,392 8 1 Sundry creditors .. .. .. .. 904 14 9 Fixed deposits and at short call .. .. 35,000 0 0 Officers' Fidelity Fund .. .. .. 500 0 0 Interest accrued but not due .. .. .. 4,186 6 4 Reserve for unearned premiums .. .. 36,609 111 Agents'balances .. .. .. .. 1,675 18 3 Investment Fluctuation R,eserve .. .. 6,000 0 0 Sundry debtors, including Motor-vehicles InsurReserve Fund constituted under section 6of the ance (Third-party Risks) Act pool . . .. 16,361 710 Government Accident Insurance Amendment Cash in hand on current account .. .. 4,583 18 0 Act, 1924 .. .. .. .. 210,130 4 8 £292,992 4 5 £292,992 4 5 J. H. Jerra-m, General Manager. 2nd April, 1930. C. B. Redward, Accountant. T 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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