COMPANY MEETING
NORWICH UNION LIFE INSURANCE SOCIETY
RECORD VALUATION SURPLUS
Tan 133rd annual general meeting of the Norwich Union Life Insurance Society was held on May 27th at Norwich.
Mr. Ernest Hicks (the president) said he thought it would be agreed that a new business total of £6,791,319 reflected the greatest credit upon their representatives in this country and throughout the Dominions. This figure represented 58 per cent. of the production of their peak year of 1938. The war claims during the year, military and civilian, amounted to about Doo,000, but in spite of this their total claims were well below those expected. The expenses ratio at 13.5 per cent. again showed a slight fall.
He was sorry he had to report a considerable decrease in the rate of interest in their invested funds. The gross rate was £4 8s. 2d. per cent., a reduction of 5s. rid. per cent. on the 1939 figures, and the net rate fell to £3 ios. 4d. per cent., showing a reduction of 7s. 9d. per cent. However, the society had for forty years maintained its reserves on a 21 per cent. net interest-earning basis, so that even in the unprecedented conditions of today they had a margin of over Li per cent. between their valuation rate and the net rate of interest actually earned on the funds.
They were fully satisfied that a conservative value had been placed upon the investments, and the Stock Exchange securities stood in the balance-sheet at or below the middle market prices ruling on Decem- ber 31st last. On the conservative bases he had indicated the actuary reported a net surplus of £5,174,554 after paying £396,731 in respect of interim bonuses during the quinquennium. This was the largest surplus ever disclosed in the history of the society, and policyholders might perhaps have expected that this would have justified the directors in declaring a bonus. They felt, however, that it was necessary to exercise the utmost caution in these days. In the best view, there- fore, the directors would have considered it necessary to carry forward a very large sum of money, which would have necessitated a consider- able reduction in their bonuses. They would provide for a valuation to be made as soon as practicable after the close of hostilities, and any bonus then declared would be in respect of the period elapsed since December 31st, 1935. In the meantime they were continuing to pay for the four years 1936-39, inclusive, interim bonuses at the full pre-war rates.
The report was unanimously adopted.
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