Trends in Industrial Assurance

Abstract

SynopsisSince the paper “Industrial Assurance Today” by the same author was submitted to the Faculty in January 1953, publication of the annual reports of the Industrial Assurance Commissioner has been resumed after a gap of about 15 years due to the war. These annual reports have contained more detailed figures than those shown in the previous statistical summaries, and it is possible to follow the trends in the business over a period of years.The following trends are quite clearly visible in these statistics and are illustrated by tables made up of figures extracted from the reports :—(i) A fairly rapid rise in sums assured and premiums per new policy, and also a more gradual rise in sums assured and premiums for paying policies in force. The premium income has increased by 33 per cent. between 1950 and 1957.(ii) A steady tendency to more endowment assurances and, because such policies are usually by lunar monthly premiums, towards monthly premiums.(iii) Some rise in the expense ratios over the whole business, although societies are able to show decreases due to progress in the elimination of book interest and to an increase in the proportion of endowment assurance business which carries lower commission rates.(iv) A gradual fall in the lapse rate for the whole business from 24.0 per cent. experienced in 1949 to 16.8 per cent. in 1957. Some offices have distinctly lower rates.(v) Rising interest rates which, in conjunction with falling mortality rates, have resulted in increased surpluses and improvements in bonus schemes. The share of surplus allocated to policyholders in the proprietary offices is now about the same as in proprietary ordinary life offices.Other features referred to in the paper are the contraction over a period in the number of agents resulting in a considerable increase in the average collections per agent per week. The earnings of agents have considerably increased. The gradual disappearance of small collecting societies is noted.