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The Pamphlet Collection of Sir Robert Stout: Volume 78

Valuations and Bonuses

Valuations and Bonuses.

Valuations are made yearly, but bonuses are allotted every three years. Although the Government Insurance Department has not made a special feature of its bonuses in order to obtain new business, it has nevertheless, since its establishment in 1870, distributed to policyholders a sum of £1,180,279 in cash. Which means an addition of £2,222,728 to the sums assured. The aim of the Department has been to safeguard in every way the interests of the assured, and it has therefore, after most stringent valuations, distributed by way of bonus as much as was available, but only after creating a strong reserve page 9 fund to meet all possible contingencies. This prudent police


has been indorsed bv the Consulting Actuaries in Englaud, Messrs. Ralph P. Hardy and George King, who have repeatedly congratulated the management on the impregnable position of the office. For many years past the Department has pursued a policy of strengthening its reserves, and the valuations are now made upon a 3½-per-cent, interest basis. At the last valuation, 31st December, 1905, the sum of £178,994 in cash was distributed amongst the policyholders, representing additions to the sums assured of £302,910. As on the previous occasion, the bonus was distributed


as a percentage of the sum assured and previous bonuses in force, so that, as the Review remarks, "Every policyholder has the satisfaction of being able to 'tot up' his own bonus, while the saving in expenses swells the profits for division."

Bonuses are allotted every three years, but, as interim bonuses are given for surrenders, loans, and claims by death or maturity, all the advantages of a more frequent distribution are secured to policyholders without the corresponding expense to the Department.

The policies valued at the last investigation, and the reserves held against them, will be seen in the following summary:—
Particulars of the Valuation at 31st December, 1905.
Number of Policies. Description. Sum assured and Bonuses. Percentage of Total Sum assured. Reserves.
£ £
25,355 Endowment assurances 5,481,104 48.0 1,618,910
14,100 Whole-life assurances 4,736,850 41.5 1,722,567
3,950 Double-endowment assurances 1,011,404 8.9 108,977
692 Children's endowments and investments 88,112 0.8 24,551
688 Civil Service assurances (with deferred annuities) 98,883* 0.8 23,201
24 Miscellaneous policies 6,714 0.0 10,057
44,809 11,423,067 100.0 3,508,203
328 Annuities, £l3,740 per annum 118,432
45,137 £3,626,695