The Sun.
London, England, 1847-01-19 00:00:00

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"It is clear, then, that the prospects of the policyholders
at future divisions are most favourable, partly from the un-
usually large sum retained to meet claims, as shown above,
and partly from the reserve of so considerable an amount as
51,5001., out of profits thus ascertained.
"These facts, which have .operated to a certain extent in
the diminution of former bonuses, will undoubtedly contri-
bute most powerfully to increase the amount of profits to bo
appropriated to the assured at all succeeding divisions.
In confirmation of this view, the Directors need only
remind the assured of the statement made at the- division in
January, 1842, that the two preceding bonuses had averaged
22 per cent, on the premiums ; that the one then divided
averaged 28 per cent., and that the future bonuses were ex-
pected to exceed that amount.
"The most sanguine expectations entertained at that time
have been fully realised by the amount of the present bonus
averaging more than 36 per cent. ; and on precisely the
same grounds the Directors conceive themselves entitled to
assert, with additional confidence, that its further Increase
from time to time is almost certain.
" The large and increasing amount of the Society's busi-
news, and the proportionate diminution of the expense of
management (which is now only 3% per cent. on the
income), must also be taken into account in the anticipation
of future profits.
" The Directors have only to add, that they have in-
structed the actuary to exhibit to any proprietor or policy
holder, or to any person who may be desirous of assuring,
the details of all the calculations, with a full statement of
the assets and liabilities, and balance-sheets of the Society."
So far as he (the Chairman) was concerned, any comment
was unnecessary, for he believed the report would speak sa-
tisfactorily, both to the proprietors and the assured.—
(Applause.) He would, however, just call the attention
of the meeting to a very distinguishing feature of the Insti-
tution—the economy of its management ; which was not
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. Fowerrat, after expressing his satisfaction at the ex•
plicitnesa and contents of the report, said he would just
trouble the meeting with one or two observations. The sum
of 155,242/, which was announced to he 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 frern the former bonus, the
ineethig 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 29,5001.; and therefore the real
..rotit realised during the last five years was about 125,000/.
or 126,000/.
Mr. Foweun—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. FOWLEE 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
rnents of premium.
Mr. WHITEHOUSE apprehended that the sum of 51,5001.,
which formed the reserve fund, was a basis of future accumu-
lations.
The SECRETARY.—CertainIy.
Mr. NEISON (Actuary to the Medical and Invalid Assur-
ance Society) 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-
tioned, probably, whether in the infant state 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 a
very large bonus laid out far 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 had
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 po:icy 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 versa.—(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 ou
that day, and the number at present in existence. Ile also
wished to know the average age of the assured. Ile 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 useful, 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 individual.
He would in conclusion ask one other question—namely, the
number of deaths during the last five years, and whether
number
The
sarncdßE therA
ft numberfelt a
great anticipated?—(Hear, p
there had been any material ditnrence between the actual
Heiara,nhseiraert.)lng
the
reas?Tre(ir
questions which had been put by the able and intelligent
gentleman who had addressed the meeting. With respect to
the first question, lie was not aware of any other
proprietary office which had adopted theprinciple of
laying by one-third of the profits. There could
outset ion that that principle had b be 410
een a great drawbacl-
to the Company with respect to th b e onuse.s 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 Aare of bu-
siness when compared with other companies
selwli had pot
adopted this principle. All dieiciilties 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 this system had acted beneficially, he might to
the report of the Equitable Society, in which, after viving
examples of its large bonnsq, he found this statement:—
" Among the capeee whiclihave contributed to these impors
tapt reetilts is the reservation at each decennial dlvlaio4 of
Q44144*(10 the surhla NO Of Alm wrimilit49/41'' It
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