At the annual meeting of the Amenictn aloe "Underwriter, Federal Me" USA, Reid last. Wednesday ilernoon "ili thes Company's flees Trt" Band the, Directors, Fe Birsthe "year hoe of $4026.
ried net prot from opera
Stocuholdets of 53914 shares. were present or represented, Mr." C.V. Blane President of the Company, ws Shion and, taking the accounts Feed, prevented the following pot Woublless "you, aswell as Your Directors, were. disappointed in" the Pedueed prot tom the years Work: Ingand the heavy depreciation Ju Infestments" The candour which has Chwaye" dheracterzed thie, company's felolonshipe with its shareholders Gnd the "public promis me. 12 mphasice the adverse figures ana the Steulties ofthe past year. "There fret number of favourable factors, however, which do not appear on the Belanee sheet but of which we must e's precedent, 1
ance General Agency and the Tnvestshall review the work of the sie: ment Department separately, Our General Agency required "a con~ tinwation of the retrenchment started" in" 1998, expenses being reduced during the year $97,583.78 or 13 per cent. We are continuing to reduce expenses by zlmplifying and speeding up the handling of business. The difficulty of this process is apparent when: t is understood that our premium income for 1934, in spite of declining rates, was only 6.36 per cent. less than 1933, Whereas commissions and brokerages earned decreased by approximate 22 per cent. The trend to which we are adjusting ourselves is an increas amount of business coming to us through agents and as reinsurances on which we pay out commissions Instead of through direct solicitation, compradores and brokers, free of commissions. The absence of unusual coverages, stich as war risk insurance, and exceptional transactions, such as portfolio reinsurances, during 1994 also, contributed to. the reduction total commissions earned. Our success in maintaining our premium income despite the changing trend in the business is a most favourable sign, however, both for the A. A. U. as a jency and for the insurance which it controls and The underwriting results for the insurance companies which we represent continued favourable for all accounts except motored 'Motorcar insurance in French Indo-China" was sufficiently adverse cause an underwriting loss for the entire account. Competitive conditions fare severe in all fields, however, and continuously. declining' rates require the utmost ability and vigilance on the part of our underwriters.
Referring to investments, our largest. single holding is in shares of the Asia Life Insurance Company. This company's accounts for 1934 have already been published. They earned 63 per cent. on their capital. An interim dividend of 15 per cant. was declared but due to the extreme uncertainty of local financial con~ ditions, no final dividend was Aeclared. Although our company owns a controlling interest in the 'Asia Life Tnsuranee Company, we did of feel justified in urging' a final Aividend as we feel that our first responsibility 1s to the policyholders of the company. The company is in strong position and continues to make steady progress. We expect that a substantial Interim dividend will be pata as soon as local financial conditions are sufficiently clear to warrant such a course.
The International Assurance Ltd, of which we are perhaps the largest shareholders, has not yet published its accounts but will do. Within a few days and we believe the Profits from operations will be found thoroughly satisfactory to shareholders and policyholders.
Our investment in the American International Underwriters for the Philippines, Me, which is the subsidiary that took over our branch ju jin earned approximately On Its book value (cost Us) and proximately pala 2 dividend of ap-10 per cent. during the year.
'The Motor Management & Finance Company experienced a successful year, with net profit of $97,320.9¢ after writing down stocks' and providing for all contingencies, or 15 per cent on the capital of $281,118.89. No dividend was declared, the earn-{ngs being used to retire bank oblesons, Other enterprises in which we are substantially interested either directly or indirectly are the Underwriters Savings Bank for the Far East, Inc.. the Metropolitan Land Ca., Ltd. the Post-Mercury Company, the China Engineers, Ltd., and the Internationa: Investment Trist Company of China, "Ltd. The Underwriters Savings Banke and Metropolitan Land Ca, Ltd., have already published their account which In both instances -were characterized by "conservative management and consistent earnings. The Post-Mercury
net profit being $56,429.62 after setting up all necessary reserves. After providing for preferred. share dividends, the earnings on common shares amounted to 188 per cent. No dividends were paid on the common shares but the earnings were sed to reduce loans payable.
Turning to the accounts, the most noticeable feature is that the reserve for fluctuation In investments and exchange has now been used up by the continued rise in the value of silver and depreciation of securities listed on the local stock exchange, 30 that the book value of our Usted shares is now $24,226.44 in excess of the listed value. "Your directors do nef feel that the depreciation in listed accurately reflects reduction in the Intrinsic value of the securities but due chiefly to general market conditions. This comment is made With special reference to the Asia Life Insurance Company and the International Assurance Ca, Lid., as we are particularly well acquainted with the operations and true condition of these two companies.
Substantial sums have again beea ured to write down overdue accounts and deferred charges, recovery of Which the continued depression renders doubtful. Your Directors and management have made a particular effort to present to you a clean, clear count, free of all items which might Lo relled upon in normal times but should not be depended upon under present conditions. This has resulted in charges against operating profits, surplus and" reserve for doubtful: Accounts, "The final figures show the company still in a strong position. And even more important than its balance sheet strength is the strength it is. building up in the public Institutions which it owns, manages or is affiliated with. The organizing and early development of these Institutions have required and stilt require considerable sacrifice by your company but the trend of business toward local institutions and tha Hteady progress of the International Arsurance, Compagnie Franeo-Amerleaine d'Assurances, Underwriters Savings Bank and_ other aiMliates toward the strength and arning power already achieved by the Asia" Life Insurance Company. make your Directors feel that the sacrifice is wise and will be returned to us both in earnings and increased security.
Your Directors do not favour payment of any dividend at this time on common shares beyond the statutory tax saving amount required by the China Trade Act.
The meeting then approved the Balance Sheet, Statement of Profit 'Loss, and Directors' Report, and a special taxesaving dividend of 10 ents per share on the common stock outstanding, and ordered the balance of $215,004.95' carried forward.
The following Directors were re~ elected for the ensuing year:—Messrs.
Text read from the printed page and cleaned; old type leaves the occasional error.