ary report. The valuation date in the large majority of these cases was 31st December, 1925, but a number of societies failed to submit the valuations within the statutory period. The measures necessary to obtain the overdue valuations were taken immediately after that date but the reports in a number of cases were not received in time to enable a complete Summary of the whole of the results and the necessary observations upon them to be published in this Report. As it appeared to the Commissioner undesirable that the matter should be dealt with piecemeal and as it was desirable that the Report should appear as soon as possible after the end of the year to which it relates, he decided to hold over the particulars of valuations till the Report for 1927. 10.-STATISTICS FOR 1925. (A.)-General Observations. Eighteen Industrial Assurance Companies and 181 Collecting Societies made returns for 1925. The premiums collected during the year on industrial policies aggregated £45,200,000 and £9,100,000 accrued as interest on investments. Income from miscellaneous sources, amounting to £700,000, brought the income for the year to a total of £55,000,000. Of this total £16,800,000 was paid in respect of claims, surrenders, &c., and £17,900,000 was added to the funds carried forward to the following year. Of the remaining income £16,800,000 was expended in management, and £3,500,000 under miscellaneous items (including, in the case of companies, shareholders' dividends, &c.). The amounts disbursed in claims, &c., and added to the funds represented 64 per cent. of the total income for the year in the case of companies and 61 per cent. in the case of collecting societies. The number of new assurances effected during the year was 8,900,000. This figure is the highest reached since the termination of the war. The pre-war (1913) total was 10,000,000. The total number of industrial assurances in force at the end of 1925 was 70,700,000, and the aggregate sum assured about £1,030,000,000. The latter figure is double the 1913 aggregate. The average of the assurances in force with companies was £15 1s., and with societies £12 7s., the 1913 averages being, respectively, £11 8s. and £10 3s. A further comparison of the sums assured can be made in the new business undertaken by companies. These new assurances in 1913 averaged £11 9s., a figure practically the same as the average of the total assurances then in force. In 1925, however, the average sum assured by the policies taken out during the year was £18 12s. This average has fallen since 1923 when it was at its highest, viz., £20 8s. About 9 per cent. of the assurances in force with collecting societies were lapsed during the year. The figure is the same as that for 1924 but represents about one-half of the pre-war percentage. The aggregate figures, however, are controlled by those relating to the three largest collecting societies, as these account for the greater part of the business. In a number of the smaller societies the proportion of lapses is very much higher than 9 per cent. The society referred to on page 104 with a lapse ratio of 32 is an instance. Other societies show lapses ranging from 20 to 35 per cent. One of the suggestions frequently made in explanation of a high lapse ratio is that, in the return of the society concerned, the particulars of assurances are more accurate than in the returns of other societies. Policies not taken up are usually excluded from the assurances effected during the year and, in consequence, do not come into account as lapses. If the meaning of "policies not taken up" is variously interpreted, this would affect the comparison of lapse ratios as a loose interpretation would reduce the number of lapses to be accounted for in the return. All cases in which a contract of assurance has been effected should be included. The number of assurances lapsed during the year is not required to be given in the company returns. Interest ("gross ") on the industrial assurance funds of companies averaged 5.4 per cent. ; of societies 50 per cent. Municipal securities appear to be very popular with the societies, more than one-half of their investments being accounted for under that heading. Explanatory Memoranda. In preparing the abstract of the accounts of the companies for 1925, certain changes have been made. Interest is now shown in gross, i.e., before deduction of income tax and the net charge in respect of the tax is included under "Miscellaneous" expenditure. The change has two advantages. It places the interest figure for companies upon the same footing as that for collecting societies and it avoids the inconsistencies in abstracting which result from the different methods in which companies treat income tax refunded. Where refunds of tax are received, some companies credit the refund as a separate entry. Others reduce the tax deducted from "Interest dividends and rents" by the amount of tax refunded during the year and so render the net figure of little use for statistical purposes. Appropriations of valuation surplus to staff bonuses, reduction of suspense accounts and similar purposes are no longer treated as" Other Expenses of Management" but as "but as "Miscellaneous expenditure. They are consequently not brought into account in calculating the "Percentage of Management Expenses to Premium Income." All transfers to staff superannuation funds are abstracted as "Miscellaneous" expenditure and not as hitherto, only when stated to have been made out of valuation surplus. Usually the specific appropriations of the industrial fund surplus are shown in the Industrial Fund Account. If, however, the appropriations have been made through the Profit and Loss Account, the actual appropriations have been followed in order to preserve uniformity in preparing the figures. The columns. previously headed "Shareholders' Surplus and Transfers to Profit and Loss Account "have been altered to "Shareholders' Dividends, &c.", as the bulk of the figures now appearing in that column represent dividends and most of the remainder transfers to the Profit and Loss Account which have not been distributed. The 1924 figures have been brought into line with those for 1925. In the summary tables for collecting societies the "Miscellaneous" income and expenditure columns in tables (i), (ii) and (iii) include any special internal transfers, e.g., a transfer of part of a valuation surplus to the management fund. When compiling the combined combined statement (iv) such transfers are eliminated. The principal items of " Miscellaneous" expenditure for 1925 are given as footnotes to the summaries for companies on page 173, and for collecting societies on page 175 I.A.C. 20 Co-operative Insurance Society, 455,411 8,670,209 1,076,133 1,087,752 62,609 ance Co., Ltd., 31, King William I.A.C. 6 Pearl Assurance Co., I.A.C. 13 I.A.C. 3 252. High Holborn, W.C.1. Ltd., 1,106,578 18,351,628 15,341,314 5,627,417|| 836,466|| Pioneer Life Assurance Co., Ltd., 17,533 265,817 225,504 109,940 12,650 Prudential Assurance Co., Ltd., 1,985,878 47,583,623 86,784,727 15,883,871 4,684,478 I.A.C. 7 Refuge Assurance Co., Ltd., 723,873 12,745,440 7,886,093 3,954,020 522,535 Oxford Street, Manchester. I.A.C. 4 Royal London Mutual Insur ance Society, Ltd., Finsbury I.A.C. 9 Salvation Army Assurance Society, 241,891 3,400,118 1,793,060 944,609 157,592 Birmingham Totals ... ... 6,689,427 124,560,816 136,419,921 36,615,413,7,607,291) *The directory is brought up to 1926 but the figures are from Returns for 1925. **An abstract of the Other Assurance business conducted by Industrial Assurance Companies will be found in the Board of Trade Return as to Assurance Companies. + For particulars of total Industrial Assurances in force, as shown by the last Valuation Returns, see page 170. Adjusted balance in accordance with Scheme of Arrangement. § Statement covers seven months. Statement cove's 18 months. 42,870 985,399 1,129,914 361 21,975 21,097 135 1,661,366 328,772 184 38,020' 5,868 675,240 3,914,72 942,328 980,129 3,166,090 1,732,345 1,653,685 647,282 94,991,728 26-6 112,960 130,000 17,414,051 37.6 18 3,000 257,939 39.2 §§ See Explanatory Memoranda on page 124. Includes Claims on Maturity. Reimbursement of expenditure on behalf of State Insurance. The expenditure is included in the expenses charged on the opposite side of the Account. Includes a Reserve for Bonus to Staff of £440,945. |