The Sun.
London, England, 1847-01-21 00:00:00

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of the meeting to a very distinguishing feature of the loseit4C
tution—the economy of its management ; which was 16t
only well known to the proprietary, but to the public.—
(Applause ) The directors would be happy to answer
any questions which might be put to them, or to attend
to any suggestions which might be offered for the advantage
of the Institution.—(Applause.)
Mr. FOWLER. after expressing his satisfaction at the ex•
plicitness and contents of the report, said he would just
trouble the meeting with one or two observations. The sum
of 155,2421., which was announced to be the surplus arising
from the profits, consisted, he conceived, partly of the reserve
made and announced upon a former occasion. He believed
that these reserves went on accumulating and incorporating
themselves so as to a certain extent to make up this amount.
If the Secretary could state how much of the amount referred
to was composed of the reserve from the former bonus, the
meeting would be able to see more clearly the profit realised
within the last five years.
The SECRETARY said the sum laid by at the last division
(one-third of the profits) was 29,500/. ; and therefore the real
profit realised during the last five years was about 125,000 r.
or 126,000/.

Mr. Fowl.En—Then it would appear that these surpluses
must have a successive increase, each being made greater by
the reserve from the preceding one.
The SECRETARY replied that it altogether depended on the
continued increase of profits, about which no fears were en-
tertained.—( Hear, hear.)
Mr. FOWLER wished to know whether any parties had
availed themselves of the opportunity afforded of reducing
their premiums?
The SECRETARY said that a considerable number of persons
had applied their bonuses in reduction of their future pay-
ments of premium.
Mr. WHITEHOUSE apprehended that the sum of 51,500 L,
which formed the reserve fund, was a basis of future accumu-
lations.
The SECRETARY.—CertainIy.
Mr. NELSON (Actuary to the Medical and Invalid Assur-
ance S edety) congratulated the directors on the very dis-
tinguished success which had attended the company's opera..
tions.—(Applause.) Perhaps the Secretary could explain
whether the principle of having a reserve fund applied to,
other proprietary companies. It was well known that this
was a distinguished feature of several of the mutual com-
panies, and its advantages were obvious. It might be ques-
tionedoprobably, whether in the infant st ate of a company the
assured would consult their own interest by adopting such a
principle; but in a society so greatly advanced as the present
it formed a very strong recommendation to the assurers. If
it did not exist, the assured would be deprived of s
very large bonus laid out for them in future. There
was another point of great importance in the
report, and that was the mode in which the liabilites of
the Company had been ascertained. He was not in a posi-
tion to refer to individual instances, but he knew that most
serious errors had followed the course of valuation which bad
been repudiated by the society. He wished to ascertain
from the Secretary whether in ascertaining the liabilities
attaching to the policies the actual age of the assured had
been taken. There was another point in connection with
the bonus which was deserving of some explanation. Any
holder of a poiicy might select a reduction of premium in-
stead of a bonus. Now, suppose a person to select the re-
duction of a premium on the present occasion, he wished to
know whether he would be able to select a bonus in addition
on the next, and vice versd.—(llear, hear.) He believed
the last valuation wa• made up to the 30th June, 1841, and
was anxious to ascertain the number of policies in force on
that day, and the number at present in existence. He also
wished to know the average age of the assured. He asked
for this information on public grounds—(Hear, hear)—and
could not help thinking that the reports of societies of
this description would be much more valuable if they en-
tered somewhat more into the scientific details by which
their operations are regulated. He considered economy of
management one of the most honest and safe principles to
follow; but in a Company of the magnitude of the pre-
sent, a difference of 1,0001. or 2,0001. a year in the an-
nual expenditure was of little importance compared with
the errors which might be caused by adopting exploded
systems. The sort of information to which he had alluded
would be very u-eful, and in Germany a noble example had
been set in this respect. At Gotha, not only was that done,
but they published the lives assured, the number of deaths,
the periods at which the policies were effected, and they
even went so far as to give the names of the individuals.
He would in conclusion ask one other question—namely, the
number of deaths during the last five years, and whether
there had been any material difference between the actual
number and the number anticipated ?—(Hear, hear.)
The SECRETARY felt great pleasure in answering the
questions which had been put by the able and intelligent
gentleman who bad addressed the meeting. With respect to
the first question, he was not aware of any other
proprietary office which had adopted the principle of
laying by one-third of the profits. There could be no
question that that principle had been a great drawback
to the Company with respect to the bonuses which had
heretofore been declared ; and it was a matter of astonish-
ment to those who were acquainted with these matters how
the Company had got on so well. Notwithstanding this
great difficulty, the Company had done its full share of bu-
siness when compared with other companies which bad not
adopted this principle. All difficulties had now been got
over, and the plan of laying by one-third of the surplus
would do more to increase the bonuses on future occasions
than any other that could have been adopted. To prove
that thin system had acted beneficially, he might refer to
the report of the Equitable Society, in which, after giving
examples of its large bonuses, he found this statement:—
" Among the causes which have contributed to these impor-
tant results is the reservation at each decennial division of
one-third of the suplus fund for future appropriation." It
was, therefore, quite evident that the prospects of this Com-
pany for the future were pre-eminently above those of all the
other companies which had not been obliged to adopt die
system, and every person connected with it might look fa,-
ward with perfect confidence to extremely satisfactory bo-
nuses. With respect to the mode of valuation, it was state&
in the report that all the policies had been valued separately t,
and he would state in addition, that all the lives taken

as healthy lives had been valued at the increased age at.
which they had arrived on the 30th of June last. With
respect to the diseased lives, the. directors had adopted a.
course contrary to that of every other office which had taken
such live.. if they had taken a life at 40, whose real age
was 30, they had always, to all intents and purposes, con-
sidered that life as a life of 40; so that a mucli larger sum
was laid by to meet that claim than would have been laid by
had the same policy been effected in any other office. Now,
with respect to the question respecting the reduction of pre-•
mium, he begged to say that the bonus might be taken in any
shape, and at any time, that might suit the convenience of the
party interested. Another quetin put by Mr. Nelson was with
regard to the number of policies. The number at the last (I:4i-
sion, five years ago, was 3,140 ; end the numt,er now in exist-
ence was 4,138.—( Hear. ) The average age of lives on the.
books was 48. The number of deaths expected within the-
last year was 106; but he was happy to say the actual
number which had occurred was only 53, being just one-half.
—(Applause.) This was rather more favourable than the
general average ; but the same sort of mortality had existed
during the five years, with little deviation.—(Dear, hear.)
In answer to a question by Mr. STREETER,
The SECRETARY said, that in consequence of the enormous
competition which had existed between the life offices for
the last ten or twelve years, several of the more recent ones
had endeavoured to show a great bonus. In order to keep
themselves alive, they had, on the first occasion, instead of
dividing the profits up to that time, anticipated the future
profits from the business upon their books. This was an ex-
tremely fallacious mode of proceeding, and must in time
prove ruinous. It would, no doubt, have the effect of mis-
leading some persons,by giving to the office a highly flourish-
ing appearance, when that was not really the case. This
Company had, however, laid by rather too much than too
little, and had not encroached on any future profits.
Mr. NEISON had not the least hesitation in saying
that the mode of valuation which this society had rejected
would have had the effect of anticipating future bonuses,
and he was justified in that opinion by an essay read before
the Philosophical Society of Edinburgh, by one of the most
scientific writers on the subject. One feature connected with
this Society deserving of great commendation was the mi-
nuteness ot'detail with which the valuations were made.—
(Hear, hear.) He should feel obliged if the Secretary would
state the total amount assured by all the policies.
The SECRITARY-2,657,000!.
A PROPRIETOR inquired what portion of the accutnuLited
50.000/. the proprietors would eventually obtain?
The CHAIRMAN—One-sixth, as at present.
The PROPRIETOR—And the assured ?
The SECRETARY—Three-sixths, and eventually nearly
five-sixths, arising from the reservation of one-third.
Dr. REID inquired the average number of proposals for life
assurance during the last five years, and the amount of money
included in those proposals?
The SECRETARY—The average annual number of proposals
was 557, and the amount proposed by them was 339,6001.
Mr. Watsitaw said the report and the explanations which
had been given were so satisfactory, that every one interested
in the affairs of the company must feel obliged to the direc-
tors for the manner in which they had conducted its affairs.
—(Applause.) He wished particularly to impress on the
notice of the proprietors and the public the importance of
the last paragraph in the report, which invited the assured
and the public to examine with attention the state of their
own affairs. If there was one mode of inspiring confidence
better than another, it was that of giving on all occasions
every possible information, and showing no wish for con-
cealment.—(Hear, hear.) He agreed in the suggestion, that
it would be desirable in future reports to give a general out-
line of the principles on which the society's calculations were
founded.
The SECRETARY said the original draft of the report stated
the exact mode ; but the directors thought so few persons
would properly understand it, that it would be much better
for parties to call at the (lace, where every information would
be afforded.—(Hear, hear.)
The CHAIRMAN, in reply to a question by a proprietor,
said that no party would receive the bonus who had not paid
five premiums before the 30th June last.
Dr. CRUCEFIX expressed himself highly gratified with
what had taken place. He was quite satisAed that thdi
rectors had only one object in view—the good of the society:u..
and if he asked one or two questions. he trusted thst e ,±4ll
net be considered as arising from idle cuorniosrietf;tedl The pg.,
point on which he wished to ask a quesitot
lives,ei ve d properwhiwhich
healthy lives; whether the calculation
and earing a proportion and
mode of arriving at the peculiar valuation
dnbereeanit,e:kteinng
frounm-
the lives received first as such,
and regular information
a relative value;
rendered them more e societyc t t o hadth orseec
doubtful than the general progress of
or
withwhether the
re s
calculation? He also wished to know whether the directors
obfagdreca.tnismidpoererdtganncoe_tirthr
empartoteprr,iewthch h
yiof
an insurer
hadinsu always thought
in the bonus, instead of its being added to the policy for the
benefit of those for whom he might have toiled. An insurer
should become and
ethe hep r
othoughtpertproperty
0f
wmhigahtetvne
ro t
bonusbecame
ways in adpueosisthioon to
the insuring party without receiving it bit by bit in the re-
duction of premium.
The SECRETARY, in reply to the first question, said, that
more than u,ual care was always taken in admitting diseased
lives, and when they were admitted they were taken at •
corresponding premium. With respect to the second ques-
tion, the directors had no power to act in the manner sug-
gested. Dr. Crucefix did not seem to think the reduction of
premium so important as it really was. Co show its effect he
would mention one or two instances. In the 3 ear 1825,
Archdeacen Pott insured for 1,000/., paying a premium of
861. Os. 10d. This, being the fourth bonus, would not only
have the effect of extinguishing the premium, but of adding
the sum of 176/. to the policy.—(Hear, hear.)
A PROPRIETOR remarked that this was somewhat extra-
ordinary.
The SECRETARY, in explanation, said, that the fourbonusee
amounted to 4001. By taking an annuity instead, in reduc-
tion of his premium, he would obtain a larger amount than
would pay the premium.
The Rev. E. G. NV I.LCOC KS. —And for the rest of his life
not have a shilling to pay.—(Hear, hear.)
The SECRETARY.—Yes, and beyond that there would be
the addition to the policy to which he had alluded. He
would mention a younger life, the insurance on which took
place in 1827. The age was 61, and the premium 661.; but
1 by applying the bonus in a similar manner, the premium
would now be reduced to 8/. Be would just add another in-
stance or two, where two bonuses had been given. A life,
aged 69, was insured in 1832, at a premium of It OL T get
1 premium was now reduced to 35!. Ss. In another case