II.-FEMALES, aged from 15 to 50, Mortality of, in Scotland, from

III.-MALES, excluding those aged between 15 and 50, Mortality of, in Scotland, from Peritonitis.

IV.-FEMALES, excluding those aged between 15 and 50, Mortality of,

in Scotland, from Peritonitis.

HOME AND FOREIGN INTELLIGENCE.

LIBERAL ANNUITY COMPANY OF DUBLIN.
Established 1780.

REPORT BY Mr. HAROLD ENGELBACH, AS AT 5 MAY 1874. From the statistics furnished to me by your secretary, it appears there were 65 widows on the annuity list in receipt of annuities amounting to £2,533. 16s. 11d. Of these, 55 were the widows of members of over ten years' standing, and were receiving the full amount of annuity now payable, £41. 10s. 9d. Three were widows of members of nine years' standing, and were receiving £34. 128. 4d. One of eight years' standing, receiving £27. 13s. 10d. Four of six years' standing, receiving £24. 4s. 7d., and two of two years' standing, receiving £10. 78. 8d.

Of these 65 widows, 43 were on the list in July 1867, the remainder came on as follows:

The total number of members on the list was 132; of these 106 were married men, and had been members over ten years; 19 were married men of under ten years' standing. Three were bachelors, one of whom joined in May 1852, one in 1872, and one in 1873. Four were widowers, one of whom has been a subscriber since 1830, two since 1836, and one since 1845.

In proceeding with my valuation I have been guided by the necessity to comply with the Life Assurance Companies Act, 1870, under which a return must be made to the Board of Trade. There is much in the Act which does not apply to a society such as this, and the form referred to under heading No. 7 in the Fifth Schedule, which contains the Valuation Statement, is in many respects inapplicable; I have, however, followed it as closely as possible.

Tables of Mortality.

In dealing with the annuities now payable, and the contingent annuities to widows of members now married, I have used the Carlisle table, making an allowance in respect of the superiority of female life.

I could find nothing in the history of the society during the last seven years, to lead to the belief that any other table would be likely to bring out more reliable results; and I deemed it therefore advisable to put the position of the society to the same test to which it had been previously subjected.

For the same reason I have valued the liabilities and assets contingent upon future marriages, with one exception, by tables deduced from the experience of the Scotch Ministers and Schoolmasters Widows' Fund.

The exception was in fixing the amount of asset to be taken into account in respect of fines on second marriage. In doing this I was guided by the past experience of the society. Having regard to this, I found that it might be fairly assumed that 9 of the present members would re-marry. Since completing my work, I have had the advantage of reading a valuable book by Mr. Charles Ansell jun. (just published) "Statistics of Families in the Upper and Professional Classes", and it is worth noticing how very nearly the result which is shown by the experience of the "Liberal Annuity Company" is borne out by the results obtained from the history of several thousand families. Had Mr. Ansell's percentage of second marriages been used, I should have assumed 10 as the number that would have re-married, instead of 9. The asset resulting from this calculation being a contingent one, I have deemed it well to assume for safety the most unfavourable view for the society, and have therefore adhered to the society's experience.

Rate of Interest.

The rate of interest assumed in all the calculations has been 31 per-cent.

The rate realized by the company has been as follows:

If the company's funds were valued at the price of the day, the interest would be for the year 1873-4, £4. 4s. 8d. per-cent.

It will be seen from this statement, that the rate assumed is one that may be fairly relied on, and that the margin is amply sufficient to meet the small expenses of management.

Result of the Valuation.

To show the financial position of the company, I annex four statements. The first is the balance-sheet of the company on 5th May 1874. The second is the Consolidated Revenue Account for seven years ended 4th May 1874. The third shows the "Net Liability" under the company's contracts, amounting to £46,977. 08. 8d., being the difference between £58,209. Os. 1d., the value of annuities and payments to children, and £11,231. 19s. 5d., value of members' subscriptions and fines.

The fourth statement is the Valuation Balance-sheet, and shows on the credit side the amount of the company's funds and on the debit side the net liability

the difference being the surplus

...

...

£54,586. 48. 4d.

46,977. Os. 8d.

£7,609. 38. 8d.

In the absence of the mortality having proved adverse during the last seven years, it was to be anticipated that the result would approach nearly to that which it actually is; because it must be borne in mind

that in 1867 a surplus of £3,419 was left in the fund, and this accumulated at 4 per-cent interest would alone amount to £4,650, the balance being easily traceable to excess of interest over the assumed rate, and profit made by the retirement of members.

Application of Surplus.

The question as to how the surplus is to be dealt with, is the next one to be considered. If the entire £7,609 were applied to the increase of the immediate and contingent aunuities, they might be raised by £13. 11s. 5d. per-cent. That is to say, the present full annuity might be raised from £41. 10s. 9d. to £47. 38. 6d.

Having regard to the comparatively small number of members, it is clear that to appropriate all the surplus, would be injudicious, because, in consequence of the limited number of transactions involved, the society may be subject to considerable fluctuations in the future, arising from the mortality. Up to the present this does not appear to have been the case: it would be unwise, however, not to guard against a contingency which is likely sooner or later to arise.

I am of opinion that £5,000 should be set aside as reserve before any surplus should be considered as divisable. If this rule were adopted, there would be a present available sum of £2,609, which would admit of the annuities being raised to £43. 6s. 1d.

It will be observed that I have taken the funds as returned to the Board of Trade on 4th May 1874, and that the surplus of £7,609 is based upon the value of the company's funds being £54,586. 48. 4d.

The principal item among the assets is £20,000 Bank of Ireland stock, valued at £46,360. 11s. 3d. The market price of this stock on 4th May 1874, was £61,300; and if so valued, the surplus would be raised to £22,548.

The question as to how such assets ought to be valued, is one upon which there exists great diversity of opinion. My own view is that the safest course is to regard as profit on investments such profit only as has been realized.

power

From the foregoing remarks it will be seen that it is in the of the society to raise the annuities nearly up to the original sum contemplated in 1780, namely, £60 Irish, or to £55. 7s. 8d. British.* To do this, would require £74,754, the value of the increase of the annuities being £18,689.

If the Bank Stock were realized, or valued at the price of the day, the funds would stand at £69,525, so that, after providing for the full annuities, there would still remain a surplus of £3,859.

Under immediate and contingent annuities 74,754 0 0
Children's payments

2,144 0 0

76,898 0 0

At the date of this report, Bank Stock is, however, still higher, and the balance would be nearly £1,000 more than as given in this statement.

This margin I should not consider sufficient, unless some special provision were made to secure the company against a future deficiency arising from the fluctuations to which I have already referred.

Assuming the total assets to be £80,757, I should consider that the very highest to which the annuities should be raised, should be £53. 10s. Od., which I should value at £72,212, leaving an unappropriated surplus of £6,401.

In the course of the investigation I was asked whether it would be equitable to give credit to widowers for the subscriptions paid by them during widowerhood, as against fines due by them on second marriage. I would recommend this concession, the fines being assessed according to the existing scale. The effect upon the assets would be merely nominal. There remains, I believe, only one other point upon which I am required to advise, and that is as to the effect of admitting new members into the society.

This question is easily answered. I consider that the subscriptions and fines, as now fixed, may be regarded as a fair equivalent for the annuity now payable, £41. 10s. 9d., together with the alternative payment to children.

If this be the case, it is quite evident that if new members be admitted to a share of the present surplus, arising, as it does, chiefly from an extraordinary profit made on an investment, they will be receiving more than they pay for; and unless it can be anticipated that the investment of their subscriptions will be as fortunate as that of former and existing members has been, they will make no equivalent return for the benefit which they will derive by being allowed to share the present surplus.

If new members be admitted, they should be entitled only to that which their payment represents. Should they receive more, it will clearly be at the cost of the existing members and annuitants.

BALANCE SHEET of the "Liberal Annuity Company of Dublin" on the 4th May 1874.