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bhhhndWWMMmQ-puy Your Directors are pleased to present their re- port to the One Hundred and First Annual Meeting covering the balance sheet, income and expenditure, profit and lusts, investments. and other statements re- lating to 1972 operations. l "1’ --- -rCr-l : pts Street East, Hamilton, classes of ttustgte" amounted to . _ Mario. human, and use: in dollar! P' I Underwriting Account. [Mot $11,111,150 resumed in an an“ i creases in tones and expenses Writing to“ at ".522. No 1resulted in an underwriting Ions factors inthtenee this consider- (ii 993.522, Interest, iiivTieiiilyrtiy - the hams: in our un- rents, and profit on sale of se/eamed premium reserve of curities produced income 482,575.26 and the impact ot pro-‘ $2,399,433, and after provision vincinl premium taxes that are Pr income taxes, pension and payable regardless of un l Ile, special items the sum at derwriting profit or has as W. w. FOOT $1,312,330 was transferred to tttttsese taxes are paid upon writ- Chamnan of the Board isurplus tor protection at policy-inn premiums: The result Ia. _ _ holders. ttterefttee, particularly onerous The “W Shed which F The Board ot Directors new when premiums are increasing helm you In printed form m “wentywm regular meetings:rapidiy - in 1972 these taxes dicates that assets have reached) hiring the year, and the speciVarisounted to $756,572, the unprmslve total at'; Tommiuee on Organi 1 l t ion, Our admitted assets increased t56,tu,050, an tnerease ttl tomposed ot six Directors heU:try 35,591,237 to mm 35551350 “-691.23? or 13.5 per cent °V9'\thre2 additional meetings. Which 0. can. is the highest the Wen?“ year, The Company's subsidiaries/L our history. surplus was in A Litbiiitits Itand at m.m.os¢,me Missisquoi and Rouville in ‘cteased by 31,3123” to reach "MM""".' t""'" an to"'"""",") In: Hummu- allu nwvuuc nu CROW Dy 51,312,350 to RICH tte largest "em; being pr0vVlsurnnce Company and Perth iii-IST/GTA',' also a record high. sum for unpaid claims orsuraoce Company, have both Thethrmpany mum when. SISJOLOM and reserve tot un- “rude good progress in IW2. The . strong financial position. earned premiums ot 1yyey.ttjrtsitiirti and vaille PT) The past ear WIS marked by The provtswn lor unpaid claims/ance Company enjoyed an Prtwo mai ',,','lld,',2, loci the increased by $2Att3,000, necessi- derwriting profit of $i0MM.52 ( ene 'l'l'i','U'1,'2' indust DEM tated by a substantial increase‘Assets have now '.ii.iiiitib' at much be out! 'll','Rd'l"l' in the number of claims iiitTGGiirssi,' and surplus [or itrejrfl'd ever he y. . m h standing and by the very notice, protection of policyholders gem of l re an? cg c - able increase in the cost of indi‘stands at 9.099.759. Peiynsiiiiiieii 5V3” ffeets 'JUT vidual claims in almost 'C7/yG"it"t"iit by Missisquoi and 'Priiiiii a e I _ class of business transacted Mlle during 1972 amounted ir) . The increase in the reserve for $8,122,106, an increase of " W‘GOVEIIMENI unearned premiums is caused‘cent over those of the previous ENCROACHMEHT by the substantial increase tube“ Assets or the Perth mm. The future of the automobile premiums written during the ance Company have new insurance business remains year. A reached $5,933,464, an increaseinmder a cloud. Theo years ago It is noted that invested anew)“ $341,211, Surplus tor the pr+ with reference to British Colum- at the end of the year amounted ‘ection ot policyholders stands his I stated "The situation is to "6,043,3tt2, classified as (ulna! 33.031579 Premiums writtett)stiil very unsettled in that prov- lows: Vduring the year increased byline.” The} clad thSenedmlrg Boesds. Canadian Oman-menu. lands, Cooodior, Cor notation ' e 14,473,522 Puf- nod Stocks. ”on: a a l""‘"“" "-' -.._.._ - --- r---'- -- "ww- _,,, -f - - . e is a --* w, - - -_-- - 138 ears a . erth [asap] de the m The British Columbia govern-‘ $46,043,302 moss ransom“a Gimpanygoistablishedlvmi “gawk, Ith,' do merit has gone further and reg This table shows that twain use - no y ago; and business. As in Manitoba. some served exeh'slyely to te. Insur-i thirds a the investments are intEconomical Mutual Insurance agents will in the initial siiiiGit1tP9'el'e. M. British S?tl bonds and debentures: gon penCompany. the parent, was born become agents of the govern- lumbla all the requirements for cent in common stocks - all in 1871 - 102 years ago. This meat plan - others will not - 'W. cies of "Nuance for "hi-J Canadian; 12.8 per cent in pure lrepresents a total of 350 years of and others will find their own “lawman troarfs., fl',',',',',',',.',',') ferred stocks - all Canadian; ;Canadian operation. and there future so jeopardized that merPfes: etc. m receipt of PPPt and less than one per cent in is another grow in Canada that can no longer remain in busi- fial. grants. or loans, so that this mortgages, The Board of Direc- can approach that record. ness. Let us be under no illu- Itusin.ess IS lost to free en- tors has not attempted to "W The retiring Directors are sions. The socialist promises of terprise as well. pand mortgage investments intMESSrs. R. A. Harris, N. C. lower cost and better services In addition the Insurance 00rd recent years - first, because of Schneider and J. A. Vilafare merely window dressing. Nation of British Columbia is} the limited liquidity of that type, Messrs. Harris and Vila are at Their interest is to get their empowered to enter the insur-l of investment for general insur- gible for reelection, but it is hands on - to obtain control of ance field and compete withi ance companies and. secondly, with sincere regret we must in- --the automobile insurance pro tree enterprise insurers for iii) because the business of mort- dicate that because of age re- mium fund which in British Col- class at insurance other than gage investment has become a‘ '.irement provisions of the Cana--umbia in I!" amounted to aboutjautornobile. and the government highly specialized operation andidian and British lmurance $i31,000,000. The cash flow a has announced its intention ot requires a trained technical‘Companies Act, Dr. Norman C. this fund enables them to fi- entering the property insurance staff to manage a portfolio Ks c h he i de r, LL.D., having‘nance other socialist schemes, business on this basis later this) mortgage investments under to/reached the statutory limit, is and all of this without one iota year. a day's conditions. At 'rGrrUTdliteiigiye tor reelection. Mrs!“ compensation to the insur- The industry is badly divided 81.5 per cent of assets was in- Schneider has made a notable ance companies; a minimal in British Columbia, with the vested to produce income. and contribution to this Companr'iamount, if any. to the agents; British Columbia Agents' Asse bank balances earned some in- progress during the iii?'v,,i)iii,iiiiiii, regard to the loss ofciation in their brief to the gov- terest in addition. years he has been a member of taxes paid by the companies: ernment not only offering their Changes in the Federal ln-‘the Board. and further refer- without regard to their invest- support to the government to come Tax Act affecting invest/ence to this fine record of ser/mi/its' in the province; without enable them to sell government ments required the close anon-{vice will be made later in t1r)iii'r'i'; for the contribution‘automobile insurance at a re- tion of your Directors and Iti'it2 proceedings. {made to the economy of , melduced commission rate, but sug- manded more of their time than The Board wishes to express province in salaries, equipment gesting that the government go formerly. There have been no/tts appreciation of the taithful and rents. In our own case 'i',?),),',;',',' the personal lines property Co Indian “WNW!- Canadian Claims Exceed $21,000, 000 in 1972 Changes in the Federal In- come Tax Act affecting invest- ments required the close attem' tion of your Directors and de- manded more of their time than formerly. There have been no spectacular changes in security markets throughout the year. and the investment reserve of 31.750300 is considered ample in relation to present market prices of bonds and stocks The average yield on bonds and do bentures was 695 per cent, on panics, at cost mole 2t 2.306.825 Cash on hand and in banks 2,678,370 Interest and dividends dye and accrued . _ Agents' balances written on or after October I Amounts due from other insurance companies First mortgages on real estate Book value of real estate owned income taxes receivable Other assets ASSETS Bonds and debentures (note I) 830581.135 Preferred and common stocks mole ll Investment In subsidiary com $5615I 050 $66.4M.N0 Bonds and debentures are valued at amortized cost and stocks are valued at cost These amounts do not moved the values showed by the Canadian and British Insurance Com- panws Act ECONOMICAL MUTUAL INSURANCE COMPANY $l6.l52.563 5,901,324 Shah. ECONOMICAL REPORTS GROWTH - SECURITY 9,153.6!9 20,1 NJ One Hundred and First Annual Financial Statement ECONOMICAL MUTUAl INSURANCE COMPANY HEAD OFFICE KITCHENER, ONTARIO ESTABLISHED 1871 Branch Offices: VANCOUVER . EDMONTON . WINNIPEG 0 lONDON O HAMILTON . TORONTO 0 OTTAWA . MONTREAL O MONCTON q HALIFAX 3L4 " l% 34.496 Ill lib "" "rt BALANCE SHEET AS " DECEMBER 31, "" LIAIIlITIES m.“ - 17.4 per cent - to ‘reach "N7,065. There was an GJGUriiiiiii loss ot $68.83 - a slight improvement as com- (pared to the previous year. lhe aaa il JiGiika Jianisd "me; are not candid“ but they unique eomttigutiort in Canadian? Insurance. The Missisquoi and Rouville was established in was - 138 years ago; erth Insur- ance Company 'alF,'it:'r's'sii,'e,rj in 1863 - no y ago; and Economical Mutual Insurance Company, the parent, was born in “m - 102 years ago. This represents a total of 350 years of are ail subject Frovisiort for unpaid claims 816.101.375 Reserve for unearned premiums 19,278,852 Amounts due to other insurance companies 1,015,640 Reserve and unpaid claims under unregistered reinsurance 46,552 Income and other taxes payable 371385 Invesment reserve 1.730.000 Other liabilities 72tt,060 audit d a - ”"1ng It is again my privilege to report to you the re- sults of the Company's operations in the year just} concluded. 1972 was a year of consolidation fouotyr' ing the exceptional growth in our centennial year in) 1971; nonetheless our growth in 1972 was steady) ,and must be regarded as substantial, particularly, when the compounding effect of the two years It taken into account. We wrote pre miu ms " A38,386,084, an increase of 84,401,813 over 1971 when they stood at t33,984,27i--ahis represents an] increase of l2.9’-. ( There was also I Wanna! ‘increaae in the total number at 'id?, c', I claims - from “ml in if" to . ir' l a1,630in 1m-eeepineeee ‘~:"". with our growth. 'i .'/tt 3, I under a cloud. Theo years ago with relerence to British Colum- bia l stated "The situation is still very unsettled in that prov- ince." That cloud darkened be cause of the election of an NDP - a socialist - government in British Columbia. By electing this government to power the people of British Columbia have given up their freedom to choose the automobile instmmee ‘coverage best suited to their needs; the company with which claims se'rvioe lheifwould prefer to have; and to a whom they would like to do business. As in Manitoba. some agents wilt in the initial stages become agents of the govern- ment plan - others will not - and others will find their own mast be made. icould take such a position, one The company side of the in- which will result in the long run surance industry made a belatiof putting many agents out of ----------N business. .wm u... we" - ,w.....,.. v... . - , "iiiifii, will result in the long run we of permanent disability in; putting many agents out of eannot be established until a Usiness. Iinal prognosis can be made by , There are a great many competent specialist medical agents in British Columbia who ayt!t.orities. During the passage “a not agree with the British ot time everything that enters 'jcolumbia Agents' Association into an equitable settlement has 'brief, but unfortunately nee,,", increased __ hospital costs _ damage is done. At this time . eep “laughs. affecting both is not possible to fully assess the the present hospitalization and ramifications of the govern- possible future hospitalization l ment's entrance into the my. costs: . medical and surgical _ ty field, but it seems likely that costs increase; wages and sal- it Will intensify competition tor aries lost in Whole or in part tor Ht least the personal lines bust the future will be greater than (ness and exert downward pres- those at the time the accident i sure on the rate level which is occurs, The cost ttf labor and established statistically as being materials determining the cost ‘toolow ot new automobiles and parts _ Sui-oh: the team; tn he continues to rise We are all ac. President and General Manager ed and concentrated “M to alert the public to what "Ivy are losing and thereby persuade the newlyelected government to allow the private insurers to compete with it. That gown:- ment has now introduced two very significant pieces of legis- lation at the first session ol the British Columbia legislature - the Insurance Corporation at British Cohunbia Act and the Automobile Insurance Act. Under this legislation the la- suraue Corporation of British Columbia will operate, as the exclusive ngent of the cm. a compulsory automobile insur. ance monopoly'as from March 1, 1974. In Manitoba and Sas- katchewan the socialist govern- ments in those provinces permit free enterprise insurers to com- pete with the government plan ion extension coverage - that is, third party liability limits ‘higha' than the provincial statu- age; not so in British Columbia - there the government has gone a step further. as govern- mentsarepemtetodrr, undea- lcluded private insurers trom 'competing in any way (or auto- ‘mobile insurance. ‘ The British Columbia govern- ment has gone further and re- served exclusively to the Insur, ance Corporation of British CI) lumbia all the requirements for any class of insurance for mu- }nicipalities, boards, commis- sions, etc. in receipt of provin- cial grants or loans, so that this husiness is lost to thee ens wa minimum limits and lower deductibles for physieai, dam- In addition the Insurance Cor- poration of British Columbia is empowered to enter the insur- ance field and compete with true enterprise insurers for any class at insurance other than automobile. and the government has annoumed its intention at entering the property insurance business on this basis later this year. J. A. VIM .'i'/ttttiettic.tttt1tty1feee, kind in Manitoba when to date 'tiet have been many a'ssatis, “datum: ”Wham In“, uvubbu-I arbi- 11mm "0“” t',Nrrgtth'l,SISr, caution-Icahn“ J iGukuirk'iiiLrTiftikliL) "te-tsi-ttSha-tlie', mmmhmmdig tieuto-nmarsu-ute) During the past year we have gained experience in dealing with Automobile Insurance Boards and the filing of rates. There have been some woblems with this in British Columbia with regard to high-rated risks. Ot cause, it is anticipated that the Board will disappear when the government automobile in- surance pin comes into being l-ttSeri/so-ttether-lt, :M [or the mimic? . We have also been required to file our rates with the Alberta Automobile Insurance Board, and this Board has become in- creasingly aetive of late and has recently issued an order to all surance on these two types of vehicles has not been consid- ered attractive business by in- surers. One can only hope that in its judgments it will realize that rates must be adequate it there is to be an orderly and open market tor automobile in. stance in that province. in the speech from the throne not the opening at the legislature ‘in Nova Sootia in January, it was stated that the Royal Com. mission on Automobile Insur- once in that province would be bringing in its report shortly. What lies ahead there is a mat- ter at mnjecmi'e, AUTOMILE INSURANCE In the automobile department premiums increased to insurers to reduce motorcycle insurance rates by an per cent and setting maximum rates on - vehicles - automobile in- lmmmw}mmmmwniurm,mmuuy “I at-tri-ttted-a-ttitil-si-twet-s-i-ti-rite-tuw!- 'dmandimwedndbcmdhudunudyinwumhtmmmm at”. tttirty-,irsaatitimorthettteirir-re-eo'rraatr jwmmglmmmwwnmmubhhmvuw www-mnyn‘cqnmwmdvebymereplmm. ll' ",fy'%t7eomttrerisnroufPttttCse' federal gown Ou- guarantee deg-amen! In...” an“ astJaiGiiur-"tteuendissodehustutir writesttahtid.tityttomhsamt tLrarittavet-i-aaemttelierti"tittttttf1'y1'2sfrr1r but; Guarantee” ”I, m; North American "aGirrlitistotrttteraqretofwitlynitams increased My in Luottei-a-inasstryrth.e?ttuus'tr1riNtttteter.? nod and stand at “cm“mmwed.u'samdwhatnnd‘m,fi‘w1128:1335th- ”nipped without uniting [on And thepustseither Iegishl- ticularly M statistical evidence to be availed or M! study have one Industry ts able Out at that mtotuusutitttiimeomanmt-tomoret" live "In!“ tetette.t,tr.t/tatutsf5fy.e1t"t.tt compensate more you reelt that may a! vehicles to damage m-rplc, man My (at loss of satisfactory rmpood to this try seducing col- animated in the retaliating new highways are damaged by their sulleri nae. but what is the proper pricekpreval to be paid [at safety measures? (ed St: How much human suffering isinmul caused by the ban on their use’ was ft Whats theeeomtrnieatst totheisince; motoring public? Whatever ttjte,r, cost is, the consumer must ex-lpremil pert to tind it "sttected in ttteNvets price at his automobile trump Nod ante policy. Mama: “.mWMMIWm-mwmm.mmu.mu 'tr-tri-dame-_-ide-tttmet-e" m.ugoedsmmd cur ecology is inuch in the minds of most people today. but must radix that it he demands that less salt be used on our streets and highways in the winter months that more auto happen; people an 'Nuef gnu prove-1y is damaged; and that, aliottttismustaNeettheertstof insurance. Not only do the public attV was to environmental control and pollution enter into the cost of insurance. but changing atti- tudes of the public in other ‘areas contribute as well. The well-disciplined society of the past with its respect for law and under, for right and wrong. has given way to the permissive so ciety, an undisciplined one with , diminished regard for law and order. where the rights of indi- viduals seem to have become more important than the rights at society " a whole. The in- part otihe permissive society -, gives rise t? fl] mum; of, thett, arson - to obtain money to pay tor drugs - crimes of vi- olence increase " a result at their use. The automobile driver One area where governments generally do not play the can structive role that they are sin- gularly well equipped to do - in fact, the only agency that can do anything about it - is to ex- ercise better control over those who drive on our roads and highways. Driving a motor car is no longer a right, it it ever was - it is a privilege, GovemJ ments seem loathe to remove] the careless - in some cases, criminally careless - driver from our highways. You and I know that there are. such; drivers with no consideration (or the rights of others - ag- gressive drivers; impaired drivers; drivers with criminal records - who continue to be licensed to drive and who cause a highly disproportionate num~ may well be a greater menace behind the wheel than the driver, whose ability is impaired by thel use of alcohol. of Wakes, main] Expenses Ind MARKETING YIEIIDS death ttments While the Dene» Tttetreotttottte-riir- fits diner from state to statewsurance agencies counted aar- quency of accidents and ttte writer for many years to be. average cost per claim. Trans come Assistant Automobile In- ferring claims from a .thir.d surance Manager at Head at. party basis to a first party basis flee. ’will not change these two facts, STAFF put the 'ter-mt? system holds During the year our staff in- out the phmuse ot peviding creased to 456 Many of our per- Prater benefits by reducmg a%iiiiii'ii licks have been re- . . d legal ex . . p0 . "ep, an penses knew“! and Improvements PROPERTY INSURANCE "nade, all designed to Wu 5 This class of business which the importance each one has in includes fire, theft. iiaisiili)iiii progress of the Company. I Windstorm, personal property, thank them all sincerely for ‘plate glass. and the iciaiieyiiir- support, and I should like ‘policies showed an increase into especially pay tribute to our premiums from $l3,m.lM in long-service employees who 1971 to $14,303.35 in 1972, an continue to do a splendid jot) increase of $1,415,571 or 11.5 per and who are in fact the hack- cent. \bone of our organization. '; The greatest increases were; We are fortunate to have a in the package policies --dine group of agents to nephe- ‘Homeowners, Tenants iiiit,eliiiit us. Mr. I H. Argue, the land the Business Insurance Pol/Deputy General Manager, Will icy - where substantial in- more fully recognize them, butt fre were recorded. Home-‘do want to thank them for the lowners premiums increased bylloyal support and cooperation $1,3M,3M, Tenants Package bvlwe have received in 1972. "195,669, and Business lnsur- CONCLUSION 'iytnce Policies by $330,318, "er Before concluding my re- erty department claims in-imarks I wish to express my creased from 19.94] to 2l.946. tgratittstk for the wise counsel, l increase of to per cent lip-operation and help that I The continuing trend to ierlhave received from the Chair- creased frequency or fire man of the Board and all mem- iclaims, first evident in 1970, bers of the Board of Directors ‘continued through most of um. during the year. d wtm'sysmm will be the undoubtedly inches: statesit IetttteUrtitedStatesamrther was felt necessary to curb mislihnat in the independent aged since huge awards that were not} and to companies like 'tur", tte- always hsstified were forcing dicaied to the independent premiums to exceptionally high‘agency system, is the entry at levels. _ Istet. of the large tite ittguraggee Nolault vehichetmvehicklvcompatties into the general in- damage has been implemented surance market. utilizing their in only a few states sch as‘huse captive agency (omen to Massachusetts when the in-icompete for the personal lines nocent party is prohibited itiiiliiiiiliis,, In Canada this, while collecting from the negligent as yet only on the horizon is a party; in Florida the right tojdevelopment that will henrclone sue beyond $550.00 is rrts1tt1twatchinr the Personal Protection Plan ORGANIIATION expected to be introduced in Mi. To strengthen our senior man chigan October I, WN, includes agement team two Assistant minim vetticieivehicie dam-lama] Managers were .I, age. As all at these plans have pointed - Mr. w. J. Shannon. come into operation recently. I F.I.I.C., was appointed Assis- judgment On the results ettrtrttA la nt General Manager-Un- yet be made. . derwritistg, and Mr. W. D. Tay- Coming back home to Otttario, lor, B.A., F.l.l.C.. Assistant jhe tWestiort ot how best to [NV-General Manager-Claims. Mr. 1ryt mlault vehicle-tovehlcle Simpsort brings to this prmitiors physical damage. first put tor, over twenlyone years' service (ward in 1970, is still being stud. with the Ihrrnparty, “than: un- Lied, but at this date an ean- derwriting. field and claims ex- ‘sion of the "no fault" doctrine‘perience, having been previou- intothisareathesnotttnlrelty Manager of our Toronto ‘plemented. Studies are also be Branch and earlier in his career ing made to plan that our Provincial Manager for the will not only pro Iett Province of Alberta. Mr. Tay- Fiiiiiii damage . MN" low, formerly Claims Manager 'basis,ttutwit? also wrench for Canada, was appointed As. pundits tor l0“ ttf - aettt Ilatant General Inn-cer- peovitetrriiytitedteoer"m: Claims, inmnitlonolthe in- ages. Only above a figure " yet creased complexity or our Mai- undeterminedprju'xcmiz'nessandulesiuormclalm very serious In . ... (stair organization. Mr. Taylor has de- ties would the tttet Intuitive voted twerttr-five years to the tem be retained- “Under .te.tr general insurance ”has. age. As all of these plans have come into operation recently. a judgment on the results cannot yet be made. Coming back home to Ontario. theqaestiortuhowbesttoprt vide mlault vehicle-tovehicle physical damage, first put tor- ward in 1970, is still being stud. ied, but at this date an exten- sion of the "no fault" doctrine into this am has not been im- plemented. Studies are also be ing made to plan that will not only pro . lea) vehicle damage Maul: basis. but will also increase the benefits for loss of wages and; provide for limited general dam- ages. Only above a figure as yet undetermined gdqtr'Itt of verv serious ini Katalin ties would the ion liability sys- tem be retained. Under either our present basically tort liabili- ty system or on a more compre- hensive notault system, the loss cost is determined by the he quency of accidents and the average cost per claim. Trans. ferring claims from a third party basis to a first party basis will not change these two has. but the no-laull system holds out the promise of providing greater benefits hr reducing " Justine and legal expenses. PROPERTY INSURANCE The continuing trend to in. creased frequency ol fire claims, first evident in 1970, continued through most of m2. although the pace slackened somewhat-and fortunately - in the last part of the year; While our loss experience was satis. factory. it was not as good as in previous years because of the unusual frequency and because I‘ll I 5 thr a taro,wttmttteti-,tt-ettd g iardiatitm,-d.theaaamaitd n "tr-rr-tbrett-tstarry , -imastime,itiseiultrim- 3 portairttorutsumttsttrrevirt. 2 uranium“ 2 ttotttisirttinewittti-d P Woods. 2 0:: guanine deg-amen! a writesttetthtiaMitytttmhsamt a may but; Guanine: [It a mum: mere-ledmm t 1m and now stand at _ manta», This class a bust ' mmvery earrasttars-'iy,' derwriudg atanytime,b- cr ticuiarlywheottteextrutruettort N tmNstryisinahigNyemapeti- -" tsveaituaumrtaastNeaaedto G regortthntoureoqterimteewas a; '-iia.I.s-.r Mr. Matthew Somerville, A.LLC., was translated (mm Toronto Branch where he had been Chief Automobile Under-