The Daily Times.
Liverpool, Merseyside, England, 1860-08-11 00:00:00

the actuary's report on the life business of the company,
that subject would, perhaps, be considered by the pro-
prietors as of predominant interest on that occasion.
He would, therefore, make a few observations upon it
before offe►ing any remarks upon the general business.

It had hitherto been considered that the chief establish-
ment of a large life office, must either be in Edinburgh
or London, but the success of the Royal, as shown by
the actuary's report, would convince them that that
opinion was altogether erroneous. The time had passed
when information could be withheld by life offices from
the assured, and they would find that the actuary's
report was unusually full of details. Indeed, he trusted
that the.appendix and the report would be studied by
the proprietors and the public at large, with the atten-
tion which it so well deserved. (Hear, hear.) It was,
he thought, a most able document, reflecting in-
finite credit on their most excellent manager, and
afforded a large fund of very valuable informa-

tion, expressed in clear and simple language,
attended by a minuteness of detail which hitherto ha,
been altogether unusual. As an evidence of the great
success and the rapidity of that success of the Royal In-
surance Company, he would call their attention to a fact
stated iu pages 28 and 29 of the appendix, by which
they would observe that while the premiums during the
first year of the company's existence only amounted to
about £l,OOO, the life premiums during the year 1859,
which was the year then particularly under review,
being the fifteenth year of the company's existence, the
premiums amounted to no less a sum than £62,919.
(Hear, hear.) He would also call their attention to a
simple statement in paragraph 6, page 4, of the appen-
dix, by which they would observe that they had to the
credit of the life department a sum equal to 64 per cent.
of the entire premiums received from that branch of the
business. (Applause.) He wished also to allude for
one moment to the very sound principles upon which
the valuation had been made by their actuary, as
would appear not only from the report, but particularly
from the appendix to which he had already referred.
In estimating the value of their life liabilities, their
actuary had only calculated interest on the fund which
was set apart to meet their life liabilities at the rate of
3 per cent. A great many of them, who, perhaps, had
paid no great attention to such matters, would be
astonished to find the enormous difference which the
small difference in the rate of interest would make in
the estimate of the fund necessary to be set apart to
meet their life liabilities, and with their permission he
would just read one paragraph of the appendix whieh
bore upon that subject. The flattery said,—" If I had
made these valuations, reckoning the interest of money
at 4 per cent., instead of 3 per cent., which has been the
rate adopted, I estimate that the amount of liabilities,
would then appear to be only about the sum of £68,000,
instead of £147,000, as stated in the particulars
enumerated at page 39 ; and that, consequently, the
pro4t4 would nominally appear to be enhanced by no
less a sum than about £79,000. But this mode of
valuation would be deceptive and dangerous." He
thought the assared would agree that 4 per cent.
would be too high a rate of interest to calculate
on for a permanence in future, looking at the immense
period over which those life liabilities had to extend, and
that a rate of that kind would not give that confidence
to the assured which it was desirable to give to them.
He thought it would be clear to them from the statement
in the reportthat the greatest prudence had been exercised
by their actuary in making those valuations, and that
no step had been taken by him beyond what prudence
and experience in these matters would fully warrant.
There was this great advantage in the sound principles
which their actuary had laid down, that in future years
it would be attended with greater violence, and would
involve greater responsibility on the part of any suc-
ceeding actuary, if he were to adopt a laxer system
and to depart from those strict and prudent prin-
ciples which their actuary had so well laid down.
(Hear, hear.) He must say he augured most favour-
ably from the result of that report of the present
state of their business and the sound prin-
ciples on which it was founded—principles which,
he thought, were well calculated to secure safety to the
assured, and to secure to the proprietors a continuance
of that increased success to which the directors confi-
dently looked forward. Vast as had been the success of
the most eminent life establishments, he saw no reason
why the Royal should not reasonably and justly look
forward to share equally and to the same extent in the
confidence of the public. The result of their fire busi-
ness had, he thoaght, on the whole been as good as could
fairly be reckoned upon under the circumstances under
which it had been carried on. The losses on fire had
been both numerous and extensive during the year 1869
—far beyond the usual average—while premiums had
been reduced to an inadequate amount by the reckless
competition which had been caused by numerous minor
offices, and which they had to contend with. It was a
a very satisfactory thing to the directors to be able to

lay before them such a report and such a statement
under the circumstances, and he trusted they would give
them credit for having given constant and careful atten-
tion to the business of the company. They had purchased
during the past year premises in the city of Manchester
for the transaction of their important business in that
locality, and he thought the purchase would turn out a
profitable one to the coawany, r}rid give them a good
return, besides the advantage it would give them of
carrying on their business. As regarded the dividend
recommended in the report, they would have gathered
from the statement of accounts that the amount to the
credit of profit and loss at the end of the year
1858 was £22,409, and if they added to that the
amount of the English and foreign business during
the same year £36,749, it gave £59,158 as the amount
of the credit to profit and loss at the end of the year
q 59 ; to that they must add the amount at the credit of
the American business £5,740, and the amount which
they were entitled to carry to the credit of profit and
loss £22,000, in round numbers gave a total of £86,897.
The way in which they proposed to appropriate the
money, and which he hoped would meet with their
approval, was this—The amount to !the credit of the
reserve fund at the end of the year 1859 was £147,000
in round numbers; but the directors, looking at the

extensive nature of the business, and considering that
the premiums received last year, taking English
and foreign, was something like 12301000, that
though £147,000 was a very creditable sum, still
the directors thought it was not the amount at
which the reserve fund ought to stand perma-
nently, therefore they proposed to take out of
their prefits £13,000, making the reserve fund
£160,000. The dividends and bonus would altogether
amount to £44,228 18s. ld., leaving the balance to the
credit of profit and loss at the end of 1859, if their
recommendation was adopted, £29,688, or £7,=%59 more
than the'ainount Of credit of profit and loss in xB5B.
They must, in bringing these matters before them, make
some reference to their course of business during the
past six months ; and though he believed that all
who had experience in insurance offices were aware
that the fire business during that period had been ex-
tremely calamitous, he was happy to say that there
was some profit to the credit of that account, though it
was very small ; and certainly if their h,nsiness went on
in the satrie'ratie up to the end of the year, there would
be nothing like the amount which would enable them
to give 3s. dividend, and 4s. bonus. Looking at that
fact, the directors thought they ought to recommend
them to strengthen the profit and loss account, and they
hoped the proprietors would not object to increasing
the amount carried to profit and loss by £7,259. As
regarded the 2s. out of the life business, the proprietors
were aware that there could be no division of profits
until the expiration of Live years from that time. The
chairman concluded by moving the adoption of the report.
The MAYOR, in seconding the motion, said that the
report which had been read, and the sirpplerriental
remarks of the chairman, were so entirely satisfactory,
that he felt it could be unnecessary for him to make more
than a few remarks. It was always very agreeable to
to take part in a meeting of a prosperous establishment
--particularly one which had the good fortune to have
been enabled from its very foundation to place before the
shareholders and the public a favourable account of its
business. This had been the case iu an especial
manner with the Royal Insurance Company. At bad,
from its very commencement, enjoyed a large
share of public fasoirr and confidence, to which
its had proved to be so justly entitled. This
confidence he thought had been produced by various
causes—by the steady and continuous increase which it
had shown from year to year in its business ; by the
prudence of the directors in maintaining a large reserve
fund in case of losses; and last, though not least, by
the ability and indefatigable exertions of its actuary.
(Hear, hear.) He was glad to see it stated, that the
American branch had answered the fullest expectations
which were entertained of it, as be 'kiss one bf those
who adyot,:ated u continuance of the business, when
some were inclined to give it up. He believed it
would increase in safety year by year. He
thought it was very satisfactory, also, to see that
though in institutions of a similar character the fire
business had been this year unprofitable, yet that the
Royal had been able to carry a sum, though not a very
large sum, to the credit of the profit and loss of that
account. Perhaps the most interesting portion of the
report was that to which the chairman had so fully
alluded—namely, the life business, which was shown to
be in such ssatisfactory state by the able tables and
diagrams which had been drawn up by the actuary. ge
would not detain them longer by any ternarvs, nut
merely second the adoption of the report.
Mr. MOZLEY said that after the very able remarks
which had fallen from the Chairman and the Mayor, he
would not wish to detain them with any remarks of his
own. The report would be satisfactory, generally speak-
ing, to the shareholders at large, more especially as the
Chairtian had very justly brought before the proprietora
the position of the fire business. T itpses GerCl ink
had been most severe, and it had struck hin.4 *Whet it
70-414 not he proper to' inquire at the general meeting
the amount of premiums charged upon property in ware-
houses certified and uncertified, as well as upon that
within the dock walls. If he understood rightly, the
rate charged on certified warehouses ivhiie the