‘ a

rsnananv“ i_n_. "H1950

{-11-

80th Year of Life Insur

_ . _ _____ THE GUARDIAN. CHARLOTTETOWN _ M PAGE NINE improve their methods as chang- 45* ' s n P" \ ins conditions dictate. other than the year 1944 when the =1

ance Service

T0 Canadians Completed By Mutual Life 0f Canada

sales of New Insurance Exceed All Previous Records

OUTSTANDING Low NET oosr RECORD CONTINUED

President sing! General Manager

Review Com y's ogress and National p“

Outlook

lyaterloo, 0nt., February 2nd.

“Canadians can continue to live in what is probably the fairest country in the world if they retain the beliefs and virtues of their ancestors, but improve their methods as changing conditions dictate,” stated Louis L. Lang, President of The Mutual Life of Canada, when addressing thc 80th meeting of policyholders today. The pioneers who founded The Mutual Life in 1869, and earlier settlers, were hard-working thrifty men of sterling character, to whom pleading for social security instead of freedom would have sounded strange.

Mr. Lang felt that Canada's problems in 1950 will not differ much from 1949 except in variations in intensity and extent. Her geographical position makes Canada's economic condition and progress dependent to a consider- able extent on conditions in the U. S. A.

A gradual reduction in the consolidated national debt is very desirable, and unnecessary public works programs shoiéléi be deferred for periods of lesser prosperity, he stat .

Speaking specifically of the operations of The Mutual Life, Mr. Lang pointed out that the Company's investment policy had aided in the building of homes, the improvement of cities, towns and villages, and the support of Canadian business enterprises. The Mutual Life continued through its successful operations to take its place with the leaders on this continent in providing low net cost life insurance. .

The General Manager, Mr. A. E. Pequegnat, empha- sized that the world trend is away from socialism. The average freedom-loving citizen in English speaking coun- tries is not attracted by a state in which “everybody owns everything and nobody owns anything." He prefers to own all of something rather than a share of everything. Them is an increasing recognition in many countries of the undesirability of nationalizing life insurance.

New assurances placed by The Mutual Life in its 80th year reached an all-time peak, slightly over $120 Millions, an increase of more than 15% over the previous year. Mr. Pcquegnat also reported a record increase in insurance in force, a decrease in the expense rate and an increase in, the rate of interest earned.

Condensations of the addresses delivered by both Mr. Lang and Mr. Pequegnat follow: not considered as safe ll the British or American. But soon better k-nowledge of the business began to prevail. The founders of our Company properly claim- ed that iLi establishment greatly reduced the rates for life insur- ance u compared with the pre- miums then in effect, and at the some time kept. in the province ‘a large amount of money former- ly paid to the foreign companies and invested abroad.

Extension to Head Office Planned

In its early years the Com- Dlhy‘: operations were directed from oiifices in rented premises; but in 1879 it erected its first office building in a central loca- tion in Waterloo. This building served until an enlarged Head Office _on the present site of some five and one-half acres was occupied in 1912. Since that date three additions have been made.

1949 was a good year in Canada and exceeded the expectations of most observers. Gross nation- al production and national in- come were slightly greater than in 1948. industrial production was a little better. The volume of employment was about the same, although towards the close of the year unemployment increas- ed in some areas. Canadian con-

Win91‘ F-Dending decreased in some fields. There has been a considerable loss of trade for

Canadian exporters owing to the shortage of dollars. On the whole, however. Canada continued to maintain a favorable balance of trade with the world.

Outlook for I950

It would seem that our prob- lems in Canada this year will be much the same as those .with which we have struggled during recent. years, although there will be variations in intensity and ex- lent. Our economic conditions and progress depend to a con- siderable extent on conditions in the United States, which as about eleven times the population of Canada and about twenty times its wealth. We are also North Americans and must be influenced by the success or- lack of success of our friendly neigh- bours. Our increasing resources can create and establish greet new fields for production and consumption which will replace the horrible and wasteful use of materials for war.

Reduction in National Debt Essential

In 1913, before the First World War, the national debt was $544 Million. In 1922, four years__after the First World War, it was $2 Billion $900 Million. In 1949, four years after the Second World War, the consolidated national delbt la almost $17 Billion. So long as the people of Canada have the will and the opportunity

Interest Rate, Expense and Mortality Experlenoe |

The fifty-odd companies now doing business in Canada are en- gaged in keen competition. Each company endeavours to improve its interest rate as much as pos- sible consistent with safety of principal; to reduce its adminis- trative expenses without sacri- ficing sqrvice and to improve its mortality experience without re-

Lonls L. Lang President

ADDRESS n! MR. use

It is my great pleasure to re- port that our Company has par- ticipated in the economic pro- gress in which this country has sirospered, and that it. leeml destined for the next year to continue its exceptionally favor- ihle position.

It. might be interesting to re- for to some of the early history nt the community in which our Heed Office is located. and in CIPCIIMIIIIICOI which led to the incorporation of our Company in the comparatively small City of Waterloo. The first settler on the lnnd where the City now stands came hero in 1806 followed by other! who were forced to seek refuge in the British American colonies from the persecution to ivhich they were subjected in consequence of their religious scruples. Emigrlting 0h idly frm-n Germany, they settled in the neighborhood of German- town, Pennsylvania, where they remained unlil the outbreak of hostilities between England and licr American colonies. 091109“! lo war and inclined in look with riisfavor upon the cause of the revolution they emulated the ex- imples of the United Empl"?

boyallsts, came Io Canada and iottled In Waterloo.

Well adapted Io ihc pier!!!" life of Canada they entered

heartily into the rigorous condi- rlcm of their new life. Plifilini! IOr social security instead of freedom would have sounded ilrange to these sturdy P1011065- They recognized. as we do. ihe fights and the initiative nf citi- iens as a whole and not the dic- latorshlp of the few.

x

Early Difficulties Overcome

Our Company was founded on 1h» mutual principles in 1869- Noithcr life insurance nnr the necessity for ll were generally understood or appreciated, 1M1 much prejudice existed again-Ki native companies, which We"

ltricting too greatly the class eligible for insurance at stand- ard rates.

Since the war life insurance companies have been faced with continuously rising costs due to inflationary pressures. In 1949 our Company‘: expense ratio showed a moderate decrease from that experienced in 1948, and, considering the increase in od- ministrative costs generally, oom- pares quits favorably with that. of ten years ago.

Our investment policy over the past year has taken into account the great need for new money lo finance housing and municipal requirements and the expansion of business. and bclh our re- investible assets and our new funds have been directed into these channels.

The rate of mortality experi- enced by The Mutual Lifs has changed considerably since or- ganization. As significant provemenls in mortality once occur. we are able lo alter the basis of our dividend dlstri- butlon and to change the mortal- ity table used lo calculate prem- ium rstes for new policies. Six different tables have been used, and three of the changes have occurred in the last twenty-five y“... The original table used provided for 8.4 deaths per thousand at age thirty, and sub- sequent tables have provided for 7.7. 7.5, 4s, 4.3 and 2.4 deaths, respectively. The table now be- ing used extensively in the Un- ited States provides for 8d deaths per thousand at use 90. The PM“ centale improvement in mortal- ity raies has been moot IDRIIW‘ lsr s1 the mun!" some improvement has occurred at advanced ales as well-

Obsolete mortality tables are,

promptly discarded in Canada under the 80111‘ 01' If" “m9?” tion. No company 6011111 "W!"

today withcul beinl tontinullly‘,

on the alert for Wlyi 1° MW" the cost of its product. and The

Mutual Life of Canada is proudl

im- I experi- ,

ages, but

to work and have raw materials they can continue to pay the in- terse! on the vastly increased mortgage. But our national deb must be serviced and r ’ ‘ gradually if Canada is to retain her credit. It is gratifying to see that our Government has realiz-

Works Programmes

Governments are receiving many requests to embark on new plans and to extend existing

plans for various forms of wel- fare and social security, and for public works. subsidies and as- sistance on a great scale. Arc such public works necessary when production, employment. income, are still sbncnrially high’! Should not such programs be saved, as far as possible, for per- iods of lesser prosperity or sev- ere cases of depression?

Personally Built Independence Best Soclsl Security

There have been growing up on this North American continent over the past ten years great numbers of ,young people who have never known what is is to look for work. They do not under- stand that purt at. least of the present condition of affairs is the artificial and temporary result of war and its aftermath. All the people of Canada should realize that there is no security equal to that provided by the individual himself as a result of industry, in- telligence, self-denial and In

possible by

savings of many individuals Europe and the Ithese savings here to

.and interest from them. idays have passed and now we de- pend iargely upon our own nu- tlonal savings for further material development. If we do not lave, whence will com funds to extend wealth-producing enterprises. A government hls no money except ithat which iftskes from the citi- zens, Ali cXPEfllQl must be finan- iced out of the earnings and other Income of the people of Canada. Canada has had a magnlflcen‘ record over the last hundred Iyears and especially during the last fifty years. Canadians can continue to live in what is prob-

io take ill PI!“ Wm‘ the le'd'lsbly the fairest country in the era in providing low net w! life world If they retain the mum and virtues of their ancestors boil!" II" II"! ""10 lime 1937-

insurance-

The several financial state- ments lust presented provide con- clusive evidence of the continua- tion of the careful and efficient management which has character- ized our Company throughout its long history. The close con- tacts I have enjoyed throughout the your with the chief Executive Officers at Home Office, as well as with many of our field rep- resentatives permit me to assure all our members that the manl- fold operations of the Company are being well conducted.

Extract: from Address by General Manager, Mr. A. Pcqusgnat

recovery of interest previously written off was unusually large, the curve 1| no longer downward. the gross interest rate for the year 1949, 3.89%, being an in- crease of 09% over the previous year.

Expense Bole Declines

Careful control of expenditures produced a ratio of total expense to real income of 15.01%, 62% lower than that of the previous year, the first decline In this ratio since 1944, In the face of higher costs for all services and com- modities, this must be credited to n greater efficiency of operation and should refute any criticism of extravagance in the conduct of our business. Some of this improve- ment must be attributed to the steady increase in the average size of the policies issued, $2,378 in 1945 to $4.088 in 1949.

the

Within the last hundred years a definite conflict has emerged between those who maintain that the best interests of n people can only be secured through the in- tervention of an all-powerful state machine, and those who advocate

a form of government which ln- Mormmy Experhmce y"),

thrift. its early days, material de- velopment ln Canada was made the accumulation of in investment of establish ‘enterprises and to draw dividends

These

shown progress in countries where human progress has been most retarded and despotism has‘. been the governing force. But. changes

slavery to a more attractive, but deceptive_type, being clothed in the guise of security. In countries

Pequegnaf, ‘ Manager

A. E. f‘

where previously no security had existed the new doctrine made converts rapidly among malcon- tents of adjoining states. But in countries where forms of govern- ment protect the right of indivi- dual citizens to determine and work for the form of personal and family security to which they- rriight aspire, totalitarian theories have had but little appeal. Fore- most in the vanguard of the for- ces fighting for the preservation of thefreedom of the individual is found the united voice of life insurance policyholders.

Nltlonnlllltlon of Life \ Insurance

. It was not unexpected that the program of the socialist party, in both Canada and Great Britain, should include the nationaliza- tion of life insurance. However, this was apparently far from popular even among the members

ed the necessity of sound money of the socialist party for it was lllll agemcnt in balancing the quickly dropped from the party budget and making reasonable program, In Great Britain full reductions in the heavy debt load nationalization of life insurance the country has to carry. companies was restricted to in-

' dustrlai insurance, and now

page; 1:31am!“ P115110 mutunllzatlon of industrial com-

panies has been substituted for na- tionalizntion.

In Australia and New Zesland the welfare of the state has re- cently been removed from the con- trol of socialist governments. In Sweden, a commission appointed to survey the operations cf life insurance companies, with the view of possible nationalization. advised that no change be made other than that policyholders should e more strongly repre- sented n the management of the comps This recommendation, coupled with the change of atti- tude ln Great Britain pays great tribute to the mutual principle on which the great life insurance structure of the North American

_ continent has been largely erected.

New Assurances in I949 Exceed Previous Record

New assurances in The Mutual Life in 1949 reached an all-time peak, slightly over $120 Million, an increase of more than 15% over the previous year; the lncrcnsc in business in force, $90,462,796, cx- ceeded by almost $10 Million the increase of any previous yenr. We are proud of the enviable posi- tion which our lapse rate holds and strive constantly to avoid pre- ventable terminations. In five pro- vinces our Company wrote more than 10% of the ordinary busi- ness written by all companies and showed an increase in the propor- tion of business written in all the provinces, save one.

Gross Interest Earnings Rises

The high regard in which our Company has been held through out its long history zs largely at- tributable to the low net cost en- joyed by our policyholders, A fav- orable mortality experience, aris- ing from careful selection, the highest rate of Interest earnings, consistent with the sound invest- ment of funds held in trust, and an economical administration have combined to maintain our Com- pany in a position of advantage among our competitors. For over 2i years the trend of interest earnings has been downward, but

Pa terferes with the personal freédom Smuflncm, nifbfeflflg“ clgxffierrefixizlftlg" of the individual citizen only to y likelihood of being dcted upon the degree necessary t° preserve Last year's mortality result. 1,, m, n,“ mum "is 581W and 1101101" of the 49.23%, while slightly higher than realm and t” “M”! “mums gen‘ the year before, must be classed Namm“ Eonnomy Generally “guy 53am“ expmmtm" “d as a most favorable experience. Favorlbla in m“ a “59- ' being well below the average of Dun"! ‘he I35‘ 1hr" decades the last ten years, The proportion the advocates of statism have

of deaths from coronary throm- bosis continued its uPWflrd lrefld. being 33.9% of claims paid in 1949, compared tn 30.2% in 1948 and 27.4% iii 1947. An analysis by age

made have bee" mimf “Plmrfmi of the deaths from this cause in- "m" real- the lrun-‘Il-m" helm! dicntcs that the largest proportion merely ‘mm F‘ 1'13"" "f 053°"- of total deaths occurs in the ngc

group 50-59, ln which 38.4% of the deaths from all causes arise from coronary thrombosis. This com- pares with 37.39?» in age group 60-69 and 32.9% in age group 40-49. In the 70's the hazard drops lo 30.7%. Of those who die of coron- nry thrombosis our experience shows that 27.1% will occur in the 50's, 37.5% will occur in the 60's, but for those who reach the 70's the risk, will be reduced to 18.893.

Insurance Companies Aid Medical Research

A group of life insurance com- panies, including your own, has, in the past ycnr, set up a fund to assist the medical schools as- sociated with our Canadian uni- versities, to further extend med- ical research, I am confident that our policyholders, having their own interests in mind, as well as the general health of the nation, will approve our co-opcratlon in this important work,

Dividend Scale Continued

The gross surplus earnings of ‘ ‘omnany in the year Just closed amounted to $6,172,141, an increase over the previous year of $633,180. The scale of surplus ‘distribution now in effect absorb- ed $4,B94,564 of these earnings and, after allocating $500,000 to strengthen reserves permitted the transfer to Unassigned Contin- gency Funds of $822570 in 8111011111 slightly higher that of a year ago. Hrotal reserve and surplus funds lncw aggregate $252500“). 7-591: 0f ‘total assets, These results would 'nppear to ensure the continuation for some time of the basis of sur- ipllls distribution adopted a year ago.

Analysis of Assets

Over 70% of total assets is held in the form of bonds, a total of over $245 Million, of which $161,- |600,000 are obligations of the Do- minion of Canada». Other govern- ment bonds, including the Cana- dian provlnces, amount to $43,285,- 000, the balance, $40,545,000, is dis- tributed among the many Can- adian municipalitles, public utili- ties nnd high-grade corporations. Our stock investments, preferred and common, now amount to $10,- 929,000, an increase year of $2,543,000, and represent but 3% of our iotnl assets, Our carefully selected stock invest- ments are producing a splendid return, 5.70%, in 1949 as compar- ed to 5.34% in 1948. Our total investment in these securities ls still quite low compared with the maximum-of 15% of total assets permitted by the Dominion Insur- ance Act. On December 31st, 1949. the aggregate market value of our bond and stock investments show- ed nn excess over our book value of approximately $15,500,000.

during the

Mortgage Investments Exceed

17% Total Assets New mortgage loans, largely confined to single and multiple dwellings, aggregated $17,163,000 for the year. In 1945 this form of investment represented 11% ‘of total assets, but now exceeds 17%. The gross rate of interest earned on our mortgage investments in 1949 was 4.96%,

Loans to policyholders, while in- creasing slightly in the year, rcp- resented but 5% of total assets. This decline from the peak of 20% in 1934 is indicative of the growing desire on the part of policyholders generally to impair, as little as possible, the value of their policies.

’ Reserves Strengthened

The reserve maintained to sat- isfy all policy obligations has again been strengthened to pro- vide against all possible adverse trends. All new business coming on our books is valued on an in- terest assumption of 214% zinri with a mortality experience which is certainly not deteriorating, our reserve basis should provide an ample margin of safety.

Group Business Grows

The amount of Group life in- surance in force has reached $71,- 442,000, an Increase for the year of over $14 million. Allied is the Group Accident and Sickness Branch which permits the Com- puny to provide the full group in- surance package hospitalization, surgical fee, medical and weekly indemnity benefits. The income in

MUTUAL LIFE A$SIIIIAIIBE IIIIMPAIIYIIIF GAIIAIIA nnno OFFICE: wvarcnnoo. onranio

____

HEA

80th

ing $1,305,601.21

Dcduct :

LOUIS L. LANG I President <

fur MuiuAi I.l|-'E

Assurance Company

Year ended December 31, 1949

Policy Proceeds, Dividends and OtliernArnourils left witli tlie Company ...................................... .. Not Profit on Sale of Lodger Assets (after apply-

securities to otlbilile future interest yields)

Dcatli and Disability Claims ........................... ..

Mnlured Endowments and Surrender Values. 5,792,780.26 Annuity Payments ............................................... .. 558,001.93 Policy Proceeds, Dividends on Deposit and Other Amounts Withdrawn .............................. .. 5,935,387.32 General Expenses and Taxes ................................ .. 6,747,446.44 I $26,896,704.67 Increase in Policy and Staff Pension Reserves ' and Amounts on Deposit with tlie Company l9,476,641.48