Once again there was no disaster of major "importance affecting the business of this department. The hostilities in China have, however, had an unfavourable effect on the substantial volume of business we derive normally from that country. The bombardment of Shanghai and other towns has caused great damage to property, but our policies do not cover war risks and we should not, therefore, be affected in the matter of losses.
In Spain the situation, so far as we are concerned, remains much the same as it was a year ago, and I can only reiterate the hope that peace will soon be restored in that unhappy country. I am glad to say that the staff of our branches at Barcelona and Shanghai have escaped any personal injury, and I would take this opportunity of paying a warm tribute to the manner in which they have carried on under very difficult and hazardous conditions. (Hear, hear.)
Commission and expenses absorbed 48.9 per cent. of the premium income, as against-50.3 per cent. in the previous year. Although this reduction is mainly due to the increase in the premium income, it should be noted that the actual expenses are slightly Jess in amount than in 1936.
The net result of the operations of the year, after providing the customary 40 per cent. reserve, is a profit of £575,149. An amount of £575,000 has been transferred to profit and loss £7,020,978.
"While dealing with the affairs of Fire Department, I would refer to a matter which has aroused much public interest and concerning which considerable misapprehension has been manifested. I allude to the insurance of war risks in the United Kingdom. It seems to be thought that the insurance companies have suddenly withdrawn facilities which formerly existed for covering this hazard. This is not the case. The companies generally have always retrained from writing this business and all they have done recently is to make the position clear to their clients and to provide for a uniform wording of the relevant policy condition.
The reasons for the attitude of the companies are obvious.
The conditions of modern warfare on land render it impossible to estimate in advance the premiums required to cover the risk, and the acceptance of such business would create a liability which might readily entail very se ows inroads upon the funds of the Marine Section The net premiums were £703,575, an increase on the previous year of £94,059. The claims paid and outstanding amounted to £469,388.
The year under review has been one of light and shade in the marine market, The hostilities in China, to which I have already referred, re-Ited in an anxious time for underwriters, Then there was the great typhoon in Hongkong, resulting in the stranding of a number of vessels including two highly valued passenger liners, one Italian and one Japanese. Both these vessels have been refloated, the floating of the Japanese vessel being a remarkable performance on the part of the Japanese Salvage Association, None the less, a very heavy claim will eventually have to be paid on this vessel.
In December an American luxury liner of high value was lost off the coast of Formosa.
There was also a marked increase in the number of total losses throughout the world and the cost of repairs for damaged vessels continued to rise until about October last, While it is impossible to prophesy whether the cost will rise still higher, it is difficult to foresee any reduction so long as the rearmament programme continues. These dark patches have inevitably affected the volume of claim:
A sum of £100,000 has been transferred from this account to profit and loss, leaving the Marine Fund at £1,208,078. The underwriting account for 1935 has now been closed, and while we may congratulate ourselves on the profit which it shows I would remark that owing to the serious losses which have occurred and the present cost of repairs the profits of succeeding years are not likely to be so good, Accident Department The premium income amounted to £8,173.227, an increase of £531,275. I account,-and the Fire Fund stands at}am glad to say that good progress|San Mauricio was made in practically every territory in which we are operating.
Claims paid and outstanding amounted to £4,312,363 and, after providing for unexpired risk, there is
From this account the sum of £325,000 has been transferred to profit and loss, leaving the Accident Fund at £5,921,096.
Text read from the printed page and cleaned; old type leaves the occasional error.