1936-05-22 — Page 9

UNION INSURANCE SOCIETY

THE CHINA MAIL, FRIDAY, MAY 22, 1936

"Results of our operations dur- ratio during the year was 45.57

year.

Congratulations

on

ing the past year are shown in per cent which compares favour "One must not, so I am told. the Revenue Accounts that are ably with 47.29 per cent in the mention the word 'depression," before you

preceding year. The amount car-but I think the Society is to "The Marine Accounts include ried to Profit and Loss Account, be heartily congratulated final settlements made on the 1954 after providing for all known and the results obtained from its Account in connection with the outstanding losses and setting up marine and fire accounts des- Kobe Osaka Typhoon that occur the necessary reserves, was £41.-pite the heavy calls on the for- ired during September of that 150 or 7.35 per cent. as compared mer to which you, Sir, have Our losses through this with 538,873 or 6.75 per cent. in drawn, attention in your speech. disaster approximated £30,000, and 1934.

and the fact that the total un- the effect is shown in the reduced "The Accident Account showa derwriting income for 1935 ex- profit of the 1934 Marine Account an income for the year of £265.-ceeded that for 1934 by the sum when compared with the previous 13 as against £251,523 in 1934. of £8,713, is a matter of con- year. Similarly the sa Mohawk As stated above the Motor Car gratulation for all concerned wrecked last year and other section of this business proved and shows the care which is claims of lesser importance were unprofitable. the percentage of given to shareholders' interests In his speech to the shareholders of the Union Insurance charged against the 1934 Account claims paid and outstanding for by your Board and Manage- Society of Canton, Ltd. at the annual general meeting of the Com-

First year

settlements for 1935 the whole Account being 59.90 per ment pany, held in Union Building this morning. Mr. M. T. Johnson, the were approximately in the same cent. as compared with 47.72 per

ANNUAL GENERAL MEETING HELD

“EMINENTLY SATISFACTORY" POSITION DISCLOSED

were

Mr. M. T. Johnson was in the spreading to any extent by the policies. In the aggregate how-

of international Currency

currency.

the maintenance

Reserve Fund

"It is to be regretted that the

I

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Chairman, mentioned that, when considering dividend recommen-amount as during 1934, but up to cent the previous year. The Accident and General Account dations during the past two years, the Directors of the company the present there are no heavy amount carried to the debit of has resulted in a loss, but with realised that in maintaining the past dividend they had to take outstandings 25 was the case of Profit and Loss Account was Motor Car accidents at their quite a large sum from the year's trading profits. However, they the 1934 Account at this time last $11.071.0.5.

present day level one can quite had in mind the extremely sound financial position of the Society, year.

"In all Account expenses were realise the extreme difficulty and it was their opinion that this strength justified a period of

Fire's Heavy Toll

slightly higher in 1935 than in which is found in obtaining profit appropriation in the shareholders' interests. It was with

1934. but exchange affects this satisfactory results from this "Fire still continues to take a regret that they had now arrived at the decision that the steps

item each year, and on this occa- class of insurance business. taken in this direction had gone as far as prudence and the prin- heavy toll of shipping. The most sign the effect was ciples of sound finance would permit, and that future trading in 1935 was the Ausonia, but the

spectacular loss due to this cause certain Charges.

to increase am perfectly satisfied, however, that your Board and the General profits must be allowed to accumulate for the added protection of Bio-Bio was also burat, as.

**In the Profit and Loss Ac- Manager will leave no stone un- "policy-holders and the production of interest for the benefit of several other valuable ships, in-

count, interest and dividend earn- turned to bring the Accident shareholders.

ings were less than in 1994 by Account into as satisfactory a In reviewing the Revenue Accounts and Balance Sheet as a cluding three tankers. In addi-1.648. Having in mind the total position as that of the Society's whole the Chairman thought the shareholders would agree with

tion there were numerous serious

amoant involved, this small dif- Marine and Fire Accounts. him that, despite the difficulties encountered during 1935, the fires on shore, all of which pro- ference is not of material moment, position disclosed was eminently satisfactory.

"Your suggestion, Sir, that duced claims under marine

and as the provision for dividend the Board are contemplating the ever, the Society's 1935 marine less than on

payable to-day is considerably payment of an interim divi- Chair and was supported by Mr. continuance

the previous year. dend in the future will, I am C. Blaker, Hon. Mr. S. H. Dodwell, friction and discord.

losses were within the

amount the position of the Profit and Loss sure, be welcomed by all share- Mr. T. A. Mitchell and Mr. K. S. instability continued also; in fact income was slightly higher in

normally incurred. Our premium Account is very satisfactory. holders. I am sure that so long Morrison Directors). Mr. A. W. [it was accentuated by China and 1935 when compared with the pre-

as the interim dividend is paid Hughes General Manager) and Hong Kong joining that large vious year. The extreme to which

on a conservative basis it is of! Car following Shareholders: group of countries which operate competition

"In

greatest advantage and Messrs. J. Bentley. J. W. Alabas-on a managed

the consolidated Balance the S carried The makes

to-day

Sheet, you will notice a change in help to shareholders that this ter, H. J. Armstrong. C. C. Black, circumstanes that necessitated vious income levels

of pre- the name of the Reserve Fund should be done, and adds to the W. II. Choy, B. M. C. da Cunha, this step have been detailed in the difficult.

exceedingly Competition J. D. Danby, R. A. Dastur, L G.Press and at any meetings such mentioned

previously shown as the "Silver" standing and popularity, with- bas been

Reserve. It is now, shown as a out increasing any risk to share- S. Dodwell, John Fleming. Leigh as the present, therefore. I will many occasions and I will not

from this Chair on “Currency" Reserve. This was holders or policy holders, of the show, as good a result as those suggest that the cloth is of suf- Garner, J. H. A. Hance, H. S. Lee, not weary you with repetition. I enlarge upon the subject as by necessary as silver currencies are Society's shares.

Unanimous Approval

now submitted, you will revert ficient dimensions" to permit of a W. R. Mansfield, S. Mason, L. Pappears sufficient to say that the doing I will be merely repeating longer in force within the area Ralph, V. R. V. Ribeiro. C. A. da rise in the value of silver from with emphasis what my predecesThe incidence of exchange has to do away gradually with the past, and which a large body of Chamber

to the dividend of 40 shillings better fitting coat than what we for which this reserve was set up. "With regard to the proposal per share paid for many years are asked Roza, F. Schreiber, M. A. 243d, at the beginning of the sers in office have said so often resulted in this reserve when ex-present uncalled share liability, investors have justifiably grown we were told there was no depres accept. At the Souza. F. W. Stapleton, Allan year to 3614d. four months later, I will say, however,

of Commerce meeting, Stevenson, Sum Pak Ming H. plus the uncertainty of the United Underwriting policy is to meet pressed in Sterling being reduced this must. I think, meet with to rely upon, or, in the alterna-sion; at any rate it was not con- Summers, George G. X. Tinson, J.States silver policy, speculation competition wherever it may arise by £71,000 this year. In 1934 approval. The fact that shares tive, that the dividend be in-ducive to a happy mind to mention F. Wright, Jr., and F H. Farnes-in exchange, political unrest and up to the paint of reason. Exchange on the December 31 have a large uncalled liability creased in easy stages.

that state of affairs; I did not silver smuggling, resulted in

was 1/8d., and ON aiwhen,

December always detracts to a certain ex- as occurs ir numerous

Stronger Than Rock position of financial instability in cases,

quite agree with the speaker an 31. 1935 was 1,d. experience indicates that

tent from their popularity as "I confess to a feeling of dis- that occasion. the country

The Exchange and Investment an investment, and I congratu-may some weeks ago on reading with you now, gentlemen, in mea- nor, unhappily, which called for this point has been past. we de-

fluctuation Account also shows alate the Board on their decision the announcement of a dividend suring it at 10 shillings per share. drastic action. In November, cline to go further. therefore, China abandoned its "War risk rates during 1935 reduction due chiefly to the Ex-in this respect, though I hope of only 30 shillings and the in- traditional silver policy, and Hong provided a small addition to our

change factor.

the change will be a gradual one tervening period prior to the re-have a Fand of $69,500 for the "And, finally, gentlemen, we In reviewing the Revenue Ac- so not to Kong followed.

premium income, but the policy of

embarrass those ceipt of the accounts rather equalisation of dividends which shareholders who may be living schooled me to anticipate a Ba-might have been put to the use it those responsible for fixing the counts and Balance Sheet rates was to keep them as low as

whole, I think you will agree with on their investments.

Lance Sheet much below the "I turn now to our own affairs circumstances warranted, and with encountered during 1935, the posi- the adoption of the Report and the Union. Speeches from this Chair at the this policy we have willingly asso-tion disclosed is eminently satis- Accounts, I should like to ex- "My anticipations were

me that despite the

"Before formally seconding enviable standard attained by last two annual general meetings ciated ourselves. have informed you that, unless in-

to our Fire busi- terest earnings increased. a Dividend reduction in

on Investments ness, I am pleased to say that the the future was inevitable.

result for 1935 was good. All propose the adoption of The though

Revenue port,

. Accounts was a slight de- amount of interest our invest-crease in premium income, this

Balance Sheet as presented.”

Chairman's Speech

Mr. M. T. Johnson, in making his annual report, said:— .

Company's Big Lok "Before proceeding to the busi ness of this meeting I wish to re fer to the loss we suffered recent-

ly through the death of a very

valued friend and one-time mem

more

Underwriter. He retired in 1919,

he established himself as one of

Underwriters in London. On retirement Mr. Saunders accepted

-~-

have been rather numerous. Mr.

for

Dividend Reduction

**In regard

¡factors

there

increasing

to a loss. The section

that OUT

but

has

mainly res-

course.

13 2

difficulties

in-

to

this

was created for.

"So much, gentlemen, for discordant note in this meeting. press to the Directors, Mr.jcorrect for the Balance Sheet but I would not like to leave my "With these remarks I beg to Hughes our General Manager, now before you reveal a posi- without expressing my apprecia- contribution to these proceedings the Re-and to all the staff of this So- tion stronger than the Rock of tion of the eficient management

and ciety, our very hearty thanks Gibraltar - it is less vulner-

factory.

Seconder's Speech

ber of the Society's staff, Mr. H. C. Saunders. From its inception the Society has been fortunate in having many members of its Staff of outstanding ability who, even at the expense of their own health, have not spared their efforts ments can earn is a matter large was more than offset by a sub-

for the very able manner in able, at any rate from the air. of the "Union" by the Directors, which they have attended to our "It with diffidence, gentle-General Manager and Stuff in a the Society's behalf. None of

ly outside our control, but one stantial reduction in the claims these perhaps have done

interests throughout the year men that I question your re-year full of difficulty. I feel cer- valuable work than Mr. Saunders. Society's funds are invested in premium

factor we can control is that the paid. It is a fact also that while

which must have been as diff-commendation to pay 30 shill-tain reference to the efficient man- He joined our service when the securities of the highest available decrease, there

35 a whole showed a

Mr. G. G. N. Tinson, in se-cult a year as any year in the jings only, but the strength of agement of the Union all over the London office was established in

was an improve conding the Report, Revenue Society's history, and I can only the Society has encouraged me World could not be made more old Broad Street in 1874, and in influence in our investment policy, in the past profitable results have said:

quality. This is the dominating ment in certain areas from which Accounts and Balance Sheet, express the hope that the inter- to disagree with your views convincingly than by quoting the

national situation will improve that a cut of 10 shillings per figure of Premis income of £1,-` 1900 was appointed the Society's and despite the relatively low re-been obtained. Exchange

"I have much pleasure in ris- during the current year and share is necessary or warrant- 610,000 in a year in which busi- turns we are receiving to-day, again played its part in our opera-ing to second the adoption of that the various difficulties ed by the working results, or ness had to be searched for, and but during the intervening years feel sure you would not endorse tions, and in addition competitive the Report, Revenue Accounts with which you all have been by the position of the Society as acceptance forced at competitive numbers and Balance Sheet as presented. faced for the last few years revealed by the Balance Sheet rates. The increase in the volume the leading and most successful any change in this policy.

"When considering dividend re-have had to be contended with. "The reduction of 10/- in the will decrease in the future" With specific "Funds" for each of business which must have been |commendations during the past

Loss On Accident Business dividend recommended this The adoption of the Report class of business undertaken by jobtained to bring about a Prezia a seat on the Society's London years, your Directors have "It is regretted that our Acci-year has no doubt been a great and Accounts were then unani- the Society running into colos-income larger than that of the year sal figures, augmented by addi- before is an eloquent testimony of realised that in maintaining the dent business last year resulted in disappointment to shareholders. mously carried. .Committee, and we were fortunate.

tional Reserves absorbing fur- the prodigious energy of the Staf. Mr. Da Roza Speaks The possibility, I might almost in having the benefit of his know-Past dividend they have had

Before the motion was put to ther colossal amounts, the mag "Whatever the views of share- ledze and advice there up to the take quite a large sum from the ponsible for this was motor car say probability, of a reduction

year's trading profits. However. business, the transaction of which was, however, clearly indicated the meeting, Mr. C. A. da Roza nitude of which was determined jholders might be as to my sugges- time of his death." At his pass-

possibly more by a desire to tion for a higher dividend, I feel ing the Society

lost a valuable they had in mind the extremely continues to present considerable to shareholders by the Chair-said:

conserve funds than required sure I will not be disowned by sound financial position of the difficulties. Motor casualties are man at the Society's centenary

"I am exercising the privilege by the necessities of each de-them in extending to the manage- associate and adviser.

addressing you given "Staff changes during the year Society, and it was their opinion increasing in number throughout meeting last year, and although of

partment, and a premium in-Iment of the Society our apprecia- that this strength justified athe world and naturally claims perhaps at first sight sharehold-to use once annually, but I

come as good as that of the tion of their successful work, and motor E. Trevor Gould, General Manager the shareholders' interests.

period of profit appropriation in under insurance policiesers were disappointed that you, like to say at the outset that I

Sir, and your fellow. Directors have

previous period, in a year which in this respect I support very following the same It is are

no questions to ask on was admittedly bad for trade, I fully the able remarks made by Australasia, has suffered

had found it advisable to re- the statements with regret that they have now Unfortunately, it is becoming a from ill-health for some

circulated think the Directors might have Mr. Tinson in seconding the adop duce the dividend by as much which, from their clarity, should been content to "carry for- tion of the Report and Accounts." while. arrived at the decision that the general practice to increase the and he found it necessary to retire steps taken in this direction have amount of claims, and Courts are that all shareholders will appre-holder seeking information on than that revealed by the c as 10/- per share, yet I am sure satisfy the most exigent shareward" a relatively smaller sum at the end of the year. He was

Chairman's Reply this with higher succeeded by Mr. R. C. Langker, one as far as prudence and the supporting

While this is regrettableciate that a conservative policy his investment or the critical counts of $686,824, which in-Chairman said:

In replying to Mr. da Roza, the who has for the past six years act-Principles of sound finance will awards.

that future trading for insurance companies it is regulating dividends recom-policy holder in gauging the effect represents ed as Assistant General Manager Permit and

mended according to the credit responsibility of the in- Fund for Dividends for over 2 Your criticism is not unwelcome

an available

"I thank you for your remarks. amount received from the invest-stitution with which he deals. we have a keen and capable officer cumulate for the added protection perience and as claims increase so not using any substantial pro-question of policy

on ex- ments of the Society, and in

years at the present rate "My remarks touch on a of distribution. I realise that

to your Directors for you have ex- musi insurance

rates. You can portion of the Society's trading after an examination of the ac- to maintain the old rate of 40 feelings of a number of Share. on which, a dip into the "carry forward" pressed what are probably the rest assured that we are making)

a thoroughly sound counts, I disagree with you profits, is every endeavour to prevent a repolicy and is in the best inter-do not expect you, Mr. Chair-extra "As partial compensation for petition of our last year's unpro-ests of not only the Society but man and gentlemen of the would replete the "carry forever, that you are viewing but

Ishillings would have cost an

jholders. £67,500; 35 shillings "I think you will admit, how- all policy holders, more especial-Board, to change your consider ward" by £33,750. These are one side of the picture. "In studying our Accounts, you ly as apparently there are no ed views, but the wealth of the admittedly big figures, but, spoke of "colossal" funds, but I tors propose to introduce the will see that the underwriting in-signs of the present cut-throat Company gives ample room for gentlemen, in Herschell, Manager in Melbourne, Practice of paying dividends half come from all departments during competition decreasing.

the atmosphere would remind you that we are in İyearly. This will involve some 1935 was £1,610,336, which is an

a bona fide difference of opinion. of millions, perhaps I will be business, the main festare loss in interest earning to the So increase of £8,713

"The present dividend is ap "I refer to the dividend which pardoned by describing the ex-which is the acceptance of "co- over 1934.

proximately the amount of in- the report has disclosed has a cost as a mere bagatelle..

losse liability. Furthermore, you dividend permits this course with- were able to maintain the pre- from the Society's investments 25 per cent. on which I address dividends received been reduced to the extent of

must realise that we are in com- out the loss being serious. Dur-vious year's income, we must not and as the present rate of inter-you in

Ultra Caution an unhappy state of

"As in the case of other insti-petition in almost every corner of ing November therefore, you can overlook the important point that est on first class investments, mind, not only, on my own betations, a variety of causes have the globe with the largest fan- anticipate an interim distribution an increased income, at reduced such as those in which the So-half,

Share Liability

but in the interests of contributed to a shrinkage in the cial institutions in existence. To Fates mesas an increased policy ciety's funds are-invested, is at that body composed of numer

on the Society's [be successful we must have finan- ceeded by Mr. G. B. Cairnes, who.that is receiving the consideration cunstances must produce a higher one has every conádence that now living in retirement, whose would not have been accused ofhere be the financial strength, "There is another financial matter Kability which under normal cir- the present time extremely low, ous ex-residents of the East fands, but I think, gentlemen, you

cial strength. Not only"` must Your Board confidently anti-

of your Directors, and that is the loss ratio. cipates, will maintain the So advisability of reducing the pre-

no farther reduction need be important source of income is prodigality had you continued the but it must be managed according ciety's position in the Melbourne éent uncalled share liability. The amount carried to Profit and Loss in yield rates a slight increase

the Marine - Account the anticipated and that with a rise their dividend from Unions. slight deviation from your tradito accepted standards. Your Direc market that has been so ably built goal we aim at is to make the on the 1934 Account was 528,-may be anticipated in the fu- tious point, nor disturb the har-ciety's dividend entirely out of

"I will not raise a conten-tional policy of finding the So-tors are of the opinion that this up by Mr. Herschell

requirement would not be fulfilled' Society's shares fully paid. The 368.68. This was less than the ture, "As you are aware, the difficult amount necessary to achieve this profit of the previous year, but is

mony which has always charac-income from investments, at least were they to recommend a deple- tion of reserves for the mainten- economic condi{end is considerable and therefore due to the series of losses to be congratulated on the fact the Society by proposing an share. I compliment you on your ance of a 50 per cent, dividend -

"The Society is, however, to terised the annual meetings of to the extent of 5 shillings per tiona continued during 1925. the change must be made gradual-which reference has been made that all its investments are of amendment, but will content altra caution, and with all res- Within certain countries quite de-ly. I hope it will be possible to above."

even the lesser Dividend you ask finite improvement was manifest, make an

the highest class possible and I myself by asking for a declara-pect to the gentleman who was

for would necessitate encroaching announcement in this but this was prevented from connection at our next Meeting.

am sure that this policy will be tion of policy that, if the ac- your Chairman at the Centenary upon Reserves. "In the Fire Account. our lossl continued by our Directors. {counts for the present year Meeting of the Society, I would)

for Australasia. In Mr. Langker Profits must be

allowed to ac equally so for the motor insuring

public. Rates are based

of policy holders and the pro- duction of interest for the benefit

who, I am confident, will be equal to all calls that may be made upon of shareholders. him in the important post to which he has been appointed."

New Zealand Offices

"Mr. A. S. Clarke, Manager for New Zealand, and Mr. W. R.

have also retired. It has been found possible to conduct Our New Zealand

the loss that you will sustain by stable experience. this year's reduction, your Direc-

business satisfac-ety, but the curtailment of the while it is satisfactory that we terest and

a Control Officer;

torily without consequently the position -of Manager for New Zealand will not be continued.

Mr. Herschell has been suc-

trend of world

"In

Fire Account Loss Ratio -

income earned

(Continued on Page 14)

You

of

11