This change, important as it is and involving the control of the company by a body well versed in our business, does not, I am very glad to say, neon that the company will lose the active and helpful ce-operation of Messrs. Spillers, Ltd.; such co-opera tion will continue to be enjoyed by the Company as in the past, and we are fortunate in having retained for ovr board the valuable knowledge and experience of Sir Malcolm Robertson and of Mr. A. F. Forbes.
Membership of F.0.C. and A.0.A.
During the year the company has become a member of the Fire Offices' Committee and of the Accident Offices' Association and this cannot but be of ultimate benefit to our results. The Company has disposed of the whole of its share holding in Merchants' & Manufacturers' Insurance Ca., Ltd.
During the year under review the Company's total premium income, excluding that of the Merchants' and Manufacturers' Insurance Ca., Ltd., declined by about £21,000. This decline was largely in the marine account and was in accordance with the policy of your board; there was also a reduction in the premium income of the accident, motor and general account due to the restriction of acceptances in view of the unsatisfactory nature of motor business generally.
£18,690 which the board recommend should be carried forward. The net amount received as interest, dividends, etc., on investments would much more than cover the cost of a dividend at the rate of 5 per cent. and by the yard-stick commonly adopted by insurance companies, the declaration of such a dividend would be amply justified. Your directors are of the opinion, however, that at this stage of the company's development it is preferable to continue to strengthen the financial structure and for this reason they do not recommend. the payment of a dividend.
It may be asserted with confidence that the company's business has never been on a sounder footing than "it present but a period of reorganization is before us and this, coupled with a restricted policy of motor insurance underwriting, is likely to lead to an increase of the expense ratio which at present is on a very moderate basis.
During the year 1938 there occurred a further general decline in the prices of British Government stocks, and of other securities quoted on the London Stock Exchange. The value of the marketable securities of the Company as at December 31, 1938, therefore showed some further depreciation as compared with their cost. The amount of depreciation is more than covered by the investment reserve fund.
I now beg to move: "That the report and accounts of the Company for the year ended December 31, 1938, as presented, be and are hereby approved and adopted" and I will ask Sir Malcolm Robertson to second the resolution. The resolution was sec-ended by Sir Malcolm Robertson and adopted.
The directors now retiring at the Arst ordinary general meeting after their appointment (Mr. Herbert Cas-tell Gray, the Rt. Hon. Lord Balfour of Burleigh and Mr. Hinton Arthur Stewart) and the director retiring by rotation (The Rt. Hon. Sir Malcolm A. Robertson, P.C., G.CMG., K.B.E.) were reelected, and Messrs, Impey, Cudworth & Ca., and Messrs. Deloitte, Plender, Griffiths & Ca., were reappointed as joint auditors of the company Fire Business This account shows a welcome increase of premium income and although the loss ratio at 54.26 per cent. is somewhat higher than in 1937, the amount carried to profit and loss account is not unsatisfactory. Our facilities for handling this class of business have increased considerably and it is hoped that this fact, coupled with our membership of the Fire Offices" Committee, will lead to a further development of this class of business, especially at home.
Text read from the printed page and cleaned; old type leaves the occasional error.