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Despite this expansion of our business the aggregate under­ writing profit unfortunately declined noticeably during the year under review. The cause of this development is to be found, apart from the generally contracted profit marg­ ins in present-day international reinsurance, chiefly in an accumulation of major claims from various branches and territories. Although such a spate of large losses is rare, the reinsurer must always be prepared for them. It is the basic function of our Company, as a professional reinsurer.
In Accident and Health insurance we have had a substan­ tial growth in premium but the profit is considerably smaller.
For many years now the Third Party Liability branch has been the chief object of concern alike for insurers and reinsurers. This section continues to run at a loss in most parts of the world, chiefly in Automobile, which is all the more serious as motorized traffic is increasing incessantly. In consequence, we have also once more recorded an in­ crease in our premium income which, however, in the year under review remained within reasonable limits and did not exceed Sw. Fes. 22 million. It is very gratifying that our constant efforts to improve our Third Party Liability business achieved for the first time at least a partial success in certain countries, principally in Europe, so that the loss in this section is less than in 1957. Large deficits were again suffered under the business from North America and other overseas territories.
Sw. Fcs. 1,000 million mark and the total business in force after deduction of terminations amounted at the end of the year under examination to Sw. Fes. 4,900 million as against Sw. Fes. 4,300 million in the preceding year. The technical result remains at the previous year's level, not­ withstanding the large volume of new business accruing —the expenses of which we write off at once as in former years—and a slight hardening in mortality experience.
Interest Income and Investments Hand in hand with the increase in our volume of business, our interest-bearing assets (securities, real estate and de­ posits) rose from Sw. Fes. 1,334 million to Sw. Fes. 1,469 million. The interest yield is correspondingly also appre­ ciably higher than last year.
Our investments, which as in the past are prudently valued, are as follows: Securities Sw. Fes. Sw. Fes.
Mr. Max Huber and Mr. R. S. Hegner retire from the Board by rotation. Mr. Hegner offers himself for re-election but we regret to say that Mr. Max Huber has expressed the definite wish by reason of his advanced age not to be con­ sidered for re-election. As a Member of our Board since 1935 Mr. Huber has for 24 years taken a keen interest in our enterprise. His great experience in international affairs, his clear and sound judgment and the universally ac­ knowledged eminence of his personality were of special value and benefit to us. We thank Mr. Huber for the ser­ vices which he has rendered.
In accordance with Article 30 of the Artic­ les of Association, the Board of Directors propose that the General Meeting should allocate the net profit as follows: 5% Statutory Dividend Staff Life Insurance and Pension Fund Directors' Remuneration
In addition the Board of Directors propose that the remainder plus the balance brought forward from 1957
: If this proposal is accepted the dividend will be Sw. Fes. 60.— per share; after deduction of the Federal Coupon Tax of 3% and the Federal Withholding Tax of 27%, Sw. Fes. 42.— will be paid on presentation of Dividend Coupon No. 3.
Capital Funds After approval of the Annual Statement for the business year 1958 the capital and free reserves of the Company amount to Sw. Fes. 160,005,688.
Investment Income (less Interest on Life Insurance and Annuity Fimds) 30,826,729 28,839,716
Zurich, 28th April 1959 By order of the Board: P. Keller, Chairman
Acting upon our terms of reference, we have to-day check­ ed the Profit and Loss Account and the Balance Sheet against the accounts of the Company which have been kept in proper form and order, and have found that the figures concord. We have further satisfied ourselves that the presentation of the operating results and of the assets of the Company conforms with the methods of valuation legally prescribed.
The securities, or the corresponding deposit certificates, were examined on the 13th and 14th January and on the 13th April 1959 and found to be in order. A check carried out on the 13th April 1959 showed that the cash in hand corresponded with the books.
We have pleasure in recommending that the Accoimts as at the 31st December 1958 be approved, that the Admini­ stration of the Company be given full discharge in this respect with best thanks, and that the proposals of the Board regarding the distribution of the profit be accepted.
Cash Deposits with Ceding Companies 726,762,393 Sundry Debtors 18,714,513 Securities 914,164,614 Real Estate and Fully-owned Real Estate Companies 42,139,852 Accrued Interest 8,202,011
Cash Deposits for Reinsurances Ceded 213,932,305 Sundry Creditors 10,610,520 Unearned Premiums for Own Account
Principal Office for Australia 51 Queen Street, Melbourne C. 1 1955 All classes