COMPANY MEETING
ALLIANCE ASSURANCE
SATISFACTORY RESULTS
THE annual general Court of the Alliance Assurance Company, Limited, was held on May ioth at the Head Office, London, E.C. Mr. Lionel N. de Rothschild, O.B.E. (the chairman), said that 1938 being the last year of the current quinquennium, the customary actuarial investigation of the financial position of the Alliance Life and Annuity Funds fell to be made as at December 31st last. The board had decided that the rate of interest to be assumed in the valuation of the life business should be 21 per cent. instead of 3 per cent. as for many years past. In spite of the greater stringency in the method of valuation adopted, which in- cluded further strengthening of miscellaneous reserves, the opinion he had expressed a year ago that the results of the actuarial investigation would be quite satisfactory had been more than realised. A surplus of £2,461,112 was disclosed and a compound reversionary bonus of 38s. per cent. per annum had been declared on with profits policies in force on December 31st, 1938. That was the same as was declared at the last quinquennial valuation, and in view of the difficult period, from an investment point of view, the still more stringent method adopted in the valuation and the substantial increase of the amount carried forward—from £223,337 to £354,812—he thought it would be agreed that it was a very satisfactory result.
The proportion of the profits in the Life department accruing to shareholders amounted to £230,497, one-fifth of which sum, namely, £46,o99, had been transferred to profit and loss account. The Economic Life, Annuity and Capital redemption business had also been valued as at December 31st, 1938, and the surplus dis- closed by the valuation was £154,724, of which £145,76 had been divided among the policyholders and the balance carried forward.
The capital redemption business of the company had also been valued and the surplus disclosed amounted to £147,653, of which £73,838 had been carried forward and the balance, £73,855, trans- ferred to Members' Account.
DEPARTMENTAL RESULTS The new Life business completed during the year amounted to £4,205,415, a record figure in the history of the company. That increase was due to a very large endowment assurance pension scheme.
The mortality experience was somewhat more favourable than in 1937. The premium income in the active Alliance Life Account had increased to £1,473,710 and the Affiance Life and Annuity Funds amounted to £22,508,744, an addition of £458,224 during the year. In the Fire department the net premiums amounted to £2,211,252, being k35,152 more than in 1937. The claims, in- cluding contributions to fire brigades, had amounted to £769,148, being £23,359 more than in 1937, the loss ratio being £34 15s. 8d. per cent., which was extremely. satisfactory. The result of the year, after increasing the additional reserve by Lioo,000, was a balance of £460,822, which had been carried to profit and loss account.
In the Accident department there had been a gratifying expan- sion in the business, the premium income amounting to Li 91,872, which was £65,116 larger than last year. The awards of es to injured third parties were continually rising and it was thought that the rates of premium would have to be increased.
The Workmen's Compensation business of the company had shown less favourable results than in the past, due in some measure to the increasing number of Common Law claims. The other branches of Accident business had showh satisfactory results and there had been a welcome increase in the more profitable classes of business in that department. The surplus in the Combined Accident Account for the year amounted to £112,161. That sum, with interest, making a total of £175,903, had been transferred to profit and loss account.
MARINE BUSINESS The Marine Premium Income was some £6,000 lower than in 1937. Hull premiums showed an increase, largely owing to the application of the joint hull understandings. The position as regarded cargo business remained unsatisfactory, and it was hoped that underwriters would soon consider collective action to improve that business. The underwriting account for 1936 had now been closed and after setting aside L11,585 to suspense account, into surplus, £73,355,
which included interest, had been carried tO profit and loss account.
The Trustee Department continued to progress satisfactorily.
Turning to the profit and loss account, £Ioo,000 had been allo- cated to reserve and £50,000 to the staff pension fund, and a slightly larger sum had been carried forward. In view of the many difficulties of last year, the results disclosed were extremely gratifying. With regard to the assets, during 1938 they had experienced a further series of major international shocks, as a result of which practically no class of investment had been immune from depre- ciation. It was not surprising, therefore, that the margin between the market values and the book values of their Stock Exchange securities had again declined during the Year; at December 31st last there was still a comfortable surplus.
The report was unanimously adopted.
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