ABLE F-Showing the Mortality (including that arising from Wrecks) prevailing among Adult Government Emigrants on the Voyage to Australia, 1847-1861, compared with that to be expected according to English Table III. Voyage. Actual Excess embarked. deaths. percent. Number Expected Actual Expected deaths of actual Number Expected Actual Expected deaths of actual Actual Excess deaths percent. It will be seen from these tables that the extra risk incurred by Government emigrants on a voyage to Australia, is caused, not so much by the danger of wreck, as by the greater intensity with which the causes ordinarily producing mortality act on a sea voyage. It further appears that the extra risk attaching to the voyage is much greater for women than for men-a result that was quite to be anticipated. The mortality on the voyage to Victoria, both among males and females, is somewhat greater than that on the other voyages. It was not considered necessary to inquire into the special circumstances to which this is due. The general result is, that the extra risk attaching to the voyage, would be covered by an extra premium of about 8s. 6d. percent for males, and 12s. 6d. percent for females. The Government emigrants among whom the above mortality prevailed were chiefly drawn from the class of artizans and agricultural labourers. The accommodation provided for them is considerably inferior to that which is generally obtained by persons belonging to the assuring classes. It may therefore be supposed that the rate of mortality found to prevail among the Government emigrants will considerably exceed that which insurance companies may expect to experience. It must be taken into account, however, that all the emigrants are select lives, being subjected to a strict medical examination to test their eligibility to receive an assisted passage; as the Colonial Governments endeavor to secure that the labor of the emigrants introduced to the colonies shall benefit them for some years. The strictest precautions are also taken by the Legislature and the Commissioners, to secure the health and safety of the emigrants on the voyage. In the case of persons proceeding to Australia in steamships, it is natural to suppose that the extra risk will be reduced nearly in the same proportion as the duration of the voyage. It is to be regretted that the Reports do not contain any information as to the ages of the emigrants embarking annually. If an analysis, on a similar plan to the analyses of mortality given for each of the voyages, but distinguishing the sexes, were given, dealing with the number embarked instead of the number dying, it would greatly facilitate such an investigation as the present; and would further enable us to state what proportion of the increased mortality occurred at each age. Even if this were not done, it is much to be desired that in the analyses of mortality on each of the voyages, the sexes were distinguished, as is done in the returns. The administration of the Passengers' Acts by the Emigration Commissioners, has enabled them to supply, in the appendixes to their Annual Reports, much interesting statistical information, which, however, from its want of completeness, it has not been found practicable to turn to account. Since the year 1854, there has been given an annual return of the ships and emigrants despatched from the United Kingdom, showing the number of vessels wrecked, and of lives lost by wreck. Had the vessels been arranged according to destination, it would have been possible to estimate the extra risk arising from the chance of wreck, which it is natural to suppose must vary considerably with the length of the voyage, and the quarter of the world to which it is made. They are, however, arranged according to port of departure only. Returns are also given of the mortality on board passenger ships proceeding to different parts of the world. As, however, we have no information as to the age or sex of either living or dying, it is impossible to state, with any approach to certainty, what the extra risk incurred on such voyages is. Report by Mr. MALCOLM and Mr. HAMILTON, Assistant Secretaries to the Board of Trade, upon the Accounts and Statements submitted to the Board of Trade, under the "Life Assurance Companies Act, 1870". (Presented to Parliament by Her Majesty's Command.) Ordered, by the House of Commons, to be Printed, 10 July 1874. To the Right Honourable the President of the Board of Trade. SIR,-In compliance with your instructions, we have the honour to submit to you the following observations upon the Accounts and Statements submitted to the Board of Trade in pursuance of the Life Assurance Companies Act, 1870. A "company" is defined for the purposes of the Act to mean "any person or persons, corporate or unincorporate, not being registered under the Acts relating to Friendly Societies, who issue, or are liable under policies of assurance upon human life within the United Kingdom, or who grant annuities upon human life within the United Kingdom." One hundred and twenty-five such companies, excluding the branch establishments of four American companies, appear to exist in the United Kingdom; and Revenue Accounts and Balance Sheets have been received from this number since the passing of the Act. The Blue Book for the year 1873, from which the table* given in Appendix (A) has been compiled, contains the annual accounts of 120 of these companies. Of the remaining five companies who failed to deposit their returns in time for publication, the total annual income from premiums does not amount to £10,000. The table may therefore be taken as practically complete. The first column of it shows the income of each company arising from premiums for assurance and the consideration money for annuities. As the Act requires that such income should be stated, less the amount of reassurance premiums paid over to other assurance offices, the sum of these items represents the total premium income of the assurance business of British offices. This amounts to £10,824,093. The extent of the business done by the American companies with residents in the United Kingdom is not known at present. The next column of Appendix (A), gives the percentage of the working expenses of each company to its premium income, excluding considerations for annuities, as accurately as the returns permit. A reference to this column will show the very different proportions of their premium income which the different offices absorb in conducting their business. Thus, of each pound entrusted to them by the assured, some companies spend as little as 1s., others spend 2s. 6d., others 5s., others 10s., and others the whole; and a few not only do this, but get into debt, trusting to be set right by *It has been thought better for various reasons to omit the figures contained in this table.-ED. J. I. A. + Had the consideration money for annuities been included in making this calculation, the percentages would have in a few cases been somewhat reduced. Neither the inclusion nor the exclusion of this item is strictly correct, but the method adopted admits of but a very small margin of error. means of future payments from the assured. In some instances at least the proportion year by year absorbed is so great that the companies can in no sense be said to exist for the benefit of those who insure in them. The third column of Appendix (A) shows the average accumulated life fund during the last official year of each company, and the fourth column shows the rate of interest made. The total of the life funds of all the companies in the United Kingdom amounts to no less a sum than £94,260,592, and the average gross interest made by them is at the rate of 4:45 per-cent approximately. This information is not only useful as affording a means of judging of the rate of interest which may be employed in assurance calculations, but is also interesting as an indication of the income obtainable from investments which may be classed as safe. As nearly as can be at present determined, the total amount of all classes of assurances effected with the companies in the United Kingdom is £338,882,752, of which the sum of £317,682,774 is to be paid on the deaths of single lives, in consideration of premiums according to one or other of the various plans adopted by assurance companies. The total of the annuities of all kinds granted by them is £502,718, of which about £413,631 yearly is now in actual payment. See Appendix (B). The 3rd section of the Life Assurance Companies Act, 1870, requires that any company established in the United Kingdom after the passing of the Act, or which commences after the passing of the Act to carry on business within the United Kingdom, shall be required to deposit £20,000 in the Court of Chancery, to be returned to the company so soon as its Life Assurance Fund accumulated out of the premiums has amounted to £40,000. No new company has been established since the passing of the Act, and only one company established out of the United Kingdom has within this period begun to carry on the business of life assurance within the United Kingdom. This is an American Company, the Continental of New York. The deposit was made in this case; but as the accumulated life fund of the company was far more than £40,000, the deposit was immediately paid out again. The Act (Sections 14 and 15) makes certain provisions with respect to the amalgamation of life assurance companies, or transfer *Where the companies have returned the net interest received after deduction of income tax, a proportionate addition has been made to the amount for the purpose of this calculation. Allowance has also been made for reversions. The valuation of the fund is necessarily taken as given in the accounts. of business from one to another, the principle of which is, that proposals for amalgamation are to be submitted to the Court of Chancery, and are to be subject to confirmation by the Court. No amalgamation or transfer in pursuance of these sections has been carried out. The 7th section of the Act requires every company at certain intervals to cause an investigation to be made into its financial condition by an actuary, and to cause an abstract of the report of the actuary to be made in the form prescribed in the fifth schedule to the Act, and to be sent to the Board of Trade. The Board of Trade have now received abstracts of such actuarial investigations from the greater number of the assurance companies, and a cursory examination would convince any person acquainted with the theories of valuation of the necessity of calling attention to the elementary principles involved in such processes. A valuation is based on an estimate of the present value of the future debts of a company, and on an estimate of the present value of its future receipts. By placing the present value of the receipts, together with the company's accumulated funds, against the present value of the debts, its object is to show whether the company will be able or unable to pay such debts as they arise, and also what amount of surplus, if any, is available for division in the shape of profit or bonus. This information is given in the replies to the questions prescribed in Schedule 5. Those replies contain, no doubt, a great many particulars which most people, especially those actively engaged in business, would scarcely spare the time to read carefully through. But the substance of the information as to the merits of the valuation may be obtained upon reference merely to the short answers given to Questions 3, 4, and 5, namely, 1. The rate of mortality employed. 2. The rate of interest employed. 3. The portion of the future premium income reserved in the valuation for future expenses and profits. Upon these three points the estimate of the net liability of a company under its policies almost entirely depends. The valuation of the investments held by a company is also an important element in determining its financial position. This is a matter which can only be determined by a careful and intelligent consideration of particulars, and may involve a certain amount of difficulty, but the difficulty is common to other undertakings besides assurance |