The Sun.
London, England, 1865-08-07 00:00:00

1864.

Profit and loss 86,489 9 4
Life profits 55,000 0 0

141,489 9 4
Dividend and bonus at les 48,675 9 2

92,814 0 2
110,460 2 10
Reserve fund

£203,274 3 0

With respect to this latter sum of 3s. per share, the di-
rectors would repeat their conviction, as on former occa-
sions, that the shareholders will understand that the dis-
tribution now made on the life account will incur no dan-
ger of creating an annual precedent, as its appropriation is
fixed at intervals of five years, and consequently no fur-
ther profits on the life branch will be divisible until the
annual meeting in the year 1870.
CHARLES TURNER, Chairman.

August 3, 1865.
ACTUARY'S REPORT.
TO THE BOARD OF DIRECTORS OF TILE ROYAL INSURANCE

COMPANY.

Gentlemen,—The termination of another of the periodical
intervals which you have appointed for the investigation
of the Life Branch of your business gives me the oppor-
tunity of again submitting my report of the result of the
calculations made to ascertain, with precision, the amount
of the liabilities of the Company under its various engage-
ments in that particular department.
It will be remembered that at the last quinquennial
period my report was accompanied by an " Appendix,"
including minute and extended details of the computations
made, which occupied a space far exceeding that which
could with any propriety be given in a report to be read at
the meeting of the simeholders. I have adopted the same
Course no if.

In my statements made at that time, I expressed a con-
fident hope that the unhesitating disclosure thus made of
your experience would bring with it an ample reward by
the entire confidence in the stability of your Company ass
Life Assurance establishment which would be engendered
in the mind of every reader on the perusal of the unusually
ample details which were then given. This expectation
has been most amply fulfilled. _ _

Whether it be from the originality of the form of that
exposition of your affairs, or whether from the degree of
success attained in the effort to convey information on a
subject generally considered abstruse, in language intelli-
gible to ordinary readers, it is at any rate certain that the
statements then made have been followed by an extension
in the Life Department during the subsequent fi're years
which exceeds all that could have been expected as a con-
sequent result.
It is, of course, manifest, however, that the subsequent
prosperity experienced could not even partially be caused
by any mere elucidation, however novel or acceptable in
its form, if it had not been for the circumstance that the
facts detailed furnished the material for the declaration of
a satisfactory bonus of far more than usual magnitude.

few illustrations will sufficiently provo the large ad-
vances made by the Company since 1859, to which I have
just adverted.

The total premiums received from the commencement of
the Company to the date of the last quinquennial investi-
gation in 1859, being a period of 15 years, was £332,993
lls. 4d. The premiums since received for the last five
years alone are £543,025 13s. 5d., an advance of 63 per
cent. over the total result of the former period, including
thrice the space of time.
The following example will place the character and ex-
tent of our advance in a still more striking light.
The sum assured on new policies effected in the last year,
1864, amounted to £1,014,897 lls. 5d., and the premium
thereon to £32,708 10s. 7d., actually more than the total
sum assured and premium on new policies oollected for the
entire ten years from 1845 to 1854 inclusive.

Again—the total funds accumulated, after paying all
claims and expenses, during the last five years, taking the
life, annuity, and endowment branches, amount to
£434,962—0n the average £86,992 annually. This amount
is 65 per cent. more than the sum collected on those com-
bined branches for the preceding fifteen years.
The appendix will be found to contain other examples of
progress equally conclusive.

The total amount of funds in hand on those branches on
the 31st December was £697,866. It was only £262,904 in
1859—a very remarkable growth of amount for so short a
space of time.
The amount of funds in the Life Branch alone, viz.,
£549,615, without reckoning the debts on half-credit poli-
cies, is equal in amount to 63 per cent. of the entire pre-
miums received from the commencement of the Company's
business. This result in itself is a test of the moderate
amounts abstracted for claims and charges of every shape and
kind.

The conclusion arrived at from the severe and rigorous
calculations made, which have now occupied some months
in preparation, is of the most gratifying kind.
The amount of profit on the last five years is £168,958
14s. 3d.

Taking, as on thelast occasion, an even sum, say £165,000,
and appropriating one-third thereof (£55,000) to credit of
the proprietors, I find the remaining amount to be sufficient,
oven though the interest of money should only be three per
cent., to provide 4 reversionary bonus of £2 per cent., per
annum to be added to the original sum assured of every par-
ticipating policy effected previously to Ist January, 1863,
and existing on the lst January, 1865, for each entire year
that it had been in existence since the last appropriation of
bonus.
It is difficult to moderate the expression of my satisfaction
and thankfulness in having had the rare opportunity of
announcing on three successive occasions, as the result of
my computations, so largo a bonus as is represeitod by the
above figures.
Tho total number of assurances now on the Company's
books is as under :
No. 10,041, sum assured £4,655,033, premium £152,159.
Many of these assurances are, however, on the non-pro-
fit scale, and no participating policy shares in the present
division of surplus unless effected more than two years on
the first of January of the present year ; tho amount as-
sured which will benefit by the bonus now declared is,
therefore, considerably less than three millions sterling.
The appendix will be found to contain many arguments
and explanations bearing on the conservative principles
adopted in the processes of valuation established, which
give security to the transactions of the life branch, and
which, at the same time, apply the materials of that secu-
rity for the ultimate advantage of each of the parties en-
gaged in the contracts, the assured as well as the assurer.
These comprise matters relating to the loading on the
pure premium, the operation of a realised interest for a suc-
cession of years above the rate used in the computation
and the maintenance of a high standard of eligibility.
On the latter subject, I am happy to announce that I have
succeeded, as far as could reasonably be expected, considering

the difficulties in my way in continuing the investigation
into the mortality prevailing among our declining lives.
The correspondence necessary to obtain information for
this purpose was very extensive, and the inquiries needful
in all parts of the world were
sof such a kind as only to stop
short of the semblance of a system of espionage, but the
effort was singularly successful.
Out of 2,381 lives rejected in the last twenty years, 1,314
have been distinctly traced.
The tabulating this collected information, alter under

PRICE 4d.
STAMPED sd.

going all the processes applied to the accepted policies, has
resulted in displaying clearly the widely separate points'
indicating respectively ruin and entire success, which may
one or other, be approached by an assurance company, in
proportion to its neglect or adoption of strict investigation
into the state of health of the lives proposed for assurance
In my last report of this kind, I pointed with much satis-
faction to the elements of prosperity, which I discerned in
the Royal as only waiting to be developed into a successful
expansion. That anticipated development has since been
so rapid and so great, that the company may be more than
content if the new business for the next quinquennial
period approximates to, yet does not reach, the magnitude
attained in the last five years.—l am, gentlemen, your
faithful servant,
Aug. 4, 1865. PERCY M. DOVE, F.S.S., F.I.A.
The CHAlRMAN—Gentlemen, when I had the pleasure,
with the other directors, of meeting you last year, I thought
it necessary to caution you against the expection that this
company was to be exempt from those alterations of profit
and loss which are inseparable from all hunr.n under-
takings, and especially those connected with insurances.
Fire business is essentially erratic in its nature.
Cycles of mishaps are found to occur from time
to time ; and as an instance I might be allowed
to refer to the great fires which took place
in Liverpool and elsewhere in '42 and '43. But since the
formation of this company in 1845 we have had no cycle
of large fires; and therefore, perhaps, the shareholders of
this company might be apt te forget that such things neces-
sarily attend on fire insurance business. They might for-
get it because the experience of this company has been re-
markably favourable. During the 20 years that this com-
pany has been in existence we have only had, I may say,
two bad years, that is, the year '6l, in which the large
London fire occurred, and the year '64, which we are now
considering. But, gentlemen, I ought to remark, with
reference to that subject, that the net profits of '63 were
considerably more than double the losses of the years
'6l and '64 taken together ; and with those two ex-
ceptions, '6l and '64, there is no year during which
the company has been in existence in which hs net
profits have not been sufficient to pay a fair and reason-
able dividend. Therefore, I do not think we have any
great reason to complain of our experience. (Cheers.)
I think we may very fairly expect an increase of our busi-
ness in the reduction of the duty. The Government, after
a great deal of pressing on the subject, has at last brought
dawn the duty to one-half, that is from 3s. to ls. 6d., and I
hope and trust that it will certainly go a sixpence further,
and reduce it to is., if they do not take it off altogether. I
think from this cause we may fairly expect an increase of
our business, for then the premium- and duty will be so
small a charge that very few people perhaps will be so im-
provident as not to insure. As regards the life business
you will have gathered from the report presented to you,
and the statement of the actuary, the great success of that
department. In fact I believe there is no example of so
rapid and substantial:a progress being made by any other
company. (Hear, hear.) Our premiums, which in 1854
amounted to £25,000 per annum, in 1864 amounted to
£150,000, being an increase of sixfold in 1864 beyond
what they were 10 years ago. Now, an income
of £150,000 from our life business will, I think, be consi-
dered by the shareholders as being a very favourable one,
and which places this company high in the rank of insur-
ance companies. I will also call your attention to the
growth of the funds of our life business, which are very
large.' Those are alluded to in the appendix, but I may
call your attention to one or two prominent facts. You
will find there that our life funds which, five years ago,
were only £262,904, have amounted on the 31st Dec. last
to no less than £697,866. This is certainly a remarkable
increase, and suggests what might be considered perhaps
an exaggerated expectation of our actuary, that in the
course of ten years we should have a million sterling in our
life capital. I cannot conclude my remarks without calling
your attention particularly to the very large bonus that we
are able to offer to insurers a bonus of 2 per cent. per
annum for five years, being 10 per cent. for the period; so
that if any gentleman had a policy of £l,OOO five years ago
he had now a policy of £l,lOO, which, I think, :you will
consider is a very great advantage to insurers, and based
as it is upon the soundest and best calculations, ;I think it
will give the very greatest confidence to the public, and
we have every reason to expect from such a bonus a very
great expansion of our life business. As regards the busi-
ness, we may, I think, be assured, and, according to all
human and reasonable calculation, we are taking our stand
among the leading life officers of tho kingdom, and that
position would be maintained. (Hear, hear.) After making
your dividend and bonus 10s., your reserve fund and pro-
fit and loss will amount to £203,279, which, under all the
circumstances, I think you will consider satisfactory. I
will conclude by meving the first resolution, that the re-
port now read be received, adopted, and printed for
circulation among the proprietors.
Mr. Boucu seconded the motion, and it was carried un-
animously.

The CHAIRMAN proposed the next resolution, approving
of the computations made by the actuary and tho bonus to
the assured.

Alderman DOVER (Deputy Mayor) seconded the resolu-
tion, which was also carried nem, con.
The CHAIRMAN then proposed the declaration of a divi-
dend and bonuses, in accordance with the recommendation
of the directors' report, which was seconded by Mr. S.
HoLmE, and agreed to.
On the motion of the CHAIRMAN, seconded by Colonel
MAWDSLEY, the outgoing directors were re-elected.
Mr. T. B. HORSFALL, M.P., said—Wo all fool that we
owe much of the success and prosperity of this company
to the management of the directors. (Hear, hear.) We
know, and perhaps many may not know, the great extent of
labour which falls on those gentlemen. Hitherto they have
had what some pleased to call a remuneration, I believe
something like £4O a year to each of them, but I am one of
those who think that where there is efficient management
there might be something like remuneration; and instead of
£4O a year, I think there ought to be something like £lOO
a year to each of them. The grant has hitherto been £l,OOO
a year, and I propose for the future that it shall be £2,500
a year.
Mr. SAMUEL HUME seconded the motion.
After a brief discussion the motion was passed.
The CHAIRMAN returned thanks on behalf of the direc-
tors.

On tho motion of the CHAIRMAN, seconded by Mr. JAMES
HOLME, the auditors were unanimously re-elected. .

Mr. YOUNGIIUsBAND returned thanks for the mark of con-
fidence in the auditors, and said they had thoroughly exa-
mined all the books, vouchers, securities, &C., of the com-
pany, and found them perfectly correct.
On the motion of Alderman COOPER, a vote of thanks
was passed to the chairman, deputy chairman, and direc-
tors of the company, and to the managers and directors of
the various branches.
The CHAIRMAN acknowledged the vote of thanks, and
proposed that the thanks of the meeting should be given to
Mr. Dove, especially for his very able report, and to the
other officers of the company.
Mr. Roves seconded the resolution, which was carried
with acclamation.
Mr. DOTE acknowledged the compliment.
A vote of thanks was unanimously passed to the chair-
tis conduct in the chair, and the meeting separated.

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