H.—Bc

2

The course of the business during the triennium is indicated in the following

CONSOLIDATED REVENUE ACCOUNT.

The premium income shows a satisfactory increase of £57,385 over that of the previous triennium. The interest income was £426,890, as against £393,078 for the former period; the average rate of interest realised was £4 9s. 3d. in 1900, £4 Bs. sd. in 1901, and £4 Bs. 6d. in 1902. These figures, which were deduced by finding the rate yielded by the interest for each year on the mean of the funds at the beginning and end of tbe year, indicate that the fall in the rate received a check towards the close of the triennium. The mortality experienced has again been very favourable, both in the General and Temperance Sections, and, though the amount paid in death-claims has increased, this is to be expected concurrently with the growth of the office. Surrenders show an increase, largely due to the winding-up of a Tontine Section falling during the triennium. The amount paid in commission and expenses of management was practically the same, being £151,826, as against £151,578 for the previous three years. The manner in which the expense-rate has declined during the last twelve years will be seen from the following : —

RATIO OF COMMISSION AND EXPENSES (excluding Taxation).

The taxation, not included in the above, represents approximately 2 per cent, of the total income, or 3 per cent, of the premium income, of the Department. THE VALUATION. The valuation of the policies current at 31st December, 1902, has been made on the same basis as that adopted in 1899 —viz., by the Institute of Actuaries' H m Table of Mortality, with interest at the rate of 3-| per cent., the net premiums only being valued as an asset, and the whole of the loading reserved for future expenses and profits. The annuities were valued by the 1884 Government Annuitants' Experience, a special reserve being made in their case to bring up their reserves to a 3 per cent, standard. A valuation upon this basis resulted in a net liability of £3,214,409, as will be seen from the appended Valuation Summary, and as the Assurance and Annuity Funds at the close of the triennium, after making a further provision of £22,783 towards the Investment Reserve Fund, amounted to £3,382,817 6s. Bd., there resulted a surplus of £168,408 6s. Bd. The following is the valuation balance-sheet: —

Valuation Balance-sheet, 31st December, 1902.

In addition to the above surplus, £9,300 was paid as interim bonus, thus making the total profit for the three years, £177,708 6s. Bd.

Dr. Funds at beginning of triennium Tontine Savings Fund No. 1 .. Renewal premiums New premiums Consideration for annuities Interest Fees £ s. d. 2,997,681 0 4 16,752 13 11 799,447 6 1 66,758 17 2 25,912 19 10 426,890 6 2 39 3 10 Cr. Death claims Matured claims Annuities paid Surrenders Cash bonuses Commission Taxes Expenses Investment reserves .. Funds at end of triennium £ s. d. 337,146 2 6 190,222 19 10 34,840 3 11 156,235 15 8 28,915 1 1 43,387 9 9 28,695 1 3 108,438 17 2 22,783 9 6 3,382,817 6 8 Total .. £4,333,482 7 4 £4,333,482 7 4 Total ..

Year. To Total Income. To Premium Income. 1890 1894 14-4 per cent. 13-5 12-2 . . 20'2 per cent. .. 19 6 .. 18-0 1898 1902 11 S .. 16-8

Dr. To Net value of liabilities (as per Valuation Summary) „ Surplus .. £ s. d. Cr. £ s. d. 3,214,409 0 0 By Accumulated Funds (as per 3,382,817 6 8 Consolidated Revenue 168,408 6 8 Account) £3.382,817 6 8 £3,382,817 6 8