FEBRUARY- 5. 1951

A.

THE GUARDIAN.

CHARLOTTETOWN

Tdutual Life

of Canada Insurance in 'Force. Increases Still)-1000.000 in

Total Insurance In Force la Sl,l88,000,000 SALES OF NEW INSURAN E

BIG

0 IN COMPANY'S HISTORY

surplus Distributed to Policyholders Exceeds 35,000,000

president

and General Manager Report on Progress of Company and Matters of National lntorost -

' Waterloo. 0nt.. Feb. 1, 1951.

"in spite of difficulties and dangers Canadians should and can. race the future with hope and courage, and also with confidence that (1-(edom, justice and right will prevail," said Mr. Louis L. Lang, Pre- sident of The Mutual Life of Cangda. when addressing the 81st meet- mg of policyholders of the Company today. when considering our lives iilld times we should remember that our lives are much easier than zhose of our Canadian forebears. he stated. Our ancestors pioneered ill the midst of other wars, depressions. periods (1 expansion and ups and downs of human existence. but they persisted and won, and we mu:-: follow their example and carry forward to an extent they did

iihich we are benefitting.

picscnl. dangers, and for

The General! Manager,

lation.

Pequegnat follow:

Lonia L. Lang. - President

CONDENSATION OF - ADDRESS BY MR. LANG

'Ilha year 1950 in North America appeared to be one of prosperity and economic health: but it was an anxious year. The early months witnessed some slackening of the business activity of the preceding four years; but this proved to be temporary. and late in the year. estimates by the Devpagtment of Trade and Commerce ' cast the likelihood of the highest level of privato and public investrnent in

- our history. The stimulus to ac-

iivity thus engendered was en- lianced by political uncertainties in Europe leadipg to the invest- ment in Canada of capital for the dstatblishment of new industries. We must not, however. judge Prosperity entirely by activity, because defence expenditures add little to the total wealth of the country and build up no real re-' sources. Need For Alertness and Preplrstion

if. five years .ago. Russia had iolnod other nations in choosing Deiwe. the world would be far advanced on the road to happi-

standards of living. Instead. Rus- sia embarked on obstruction and aggression. Consequently. the in- ternational situation has grown steadily worse. We must. contin-.io to arm and to prepare for What- GVEI may hqapen. even the worst. There can be no sparing of effort. No country can exist in the futile 11090 of isolation and expect to 030390 the universal calamity which would follow the defeat of the free nations. Increased Immigration Dednble it is necessary and prudent to WW9! our resources in order to make the but possible use of mill. 'II'io greatest. asset. of course. is the people. Oanadla can feel that they are the equal 01 In! other U is in character. courage, ability and skill; prov- ” B! the experience of two wcrld Will. our population since 1010 has doubled to is million. but it is not lujoionougb. we need moro minions of now Canadians who W"! gazed oitiscm. who will find Ind . tain homes in Oamds. inaoooo the production and con- Wmlltion of the country. defend their new land. and help to main-' llln and Inprovo its economy. Canada is far ahead of most emails: in extent and variety 0! Pflniuy products and natural nlourcsl. our industrial product- ion in Juno and temper of lot: levels. is now nearly double the pro- , 1039. 1b a considerable

- 'r.v.'-

Mu. security. recovery and better.-

not dream of, the hopes and plans which they entertained and from

Mr. Lang called for alertness on the part of the whole nation to co-operation with the Government in its ptnns for assuring the security of the country. He stressed particular- iy the need of an awareness on the part of both government and peo- ple of the dangers of inflation to the national economy. There should be a full me-asure of puibiic understanding and support of the means inc government may undertake to curb inflation. Mr. Lang siiessed the value of l'ifc insurance in retarding inflationary trends. referring io insurance premiums as dollars withdrawn from competitive circu- iniioii, directed to future security. and made available for the exten- s:on of the productive capacity of the nation.

Mr. A. E. Pequegnat, Mutual Life of Canada had continued in 1950 its Llnlbrokcn record of gi'oiv'th, new insurance to the extent of S120.-188,000 was written by the Company in its 81st year, bringing the protection in force to sl,l68.- 000.000. all on Canadians. 'Ifhese figures represent life insurance only, and do not include ann-uities or the business of the Sickness and Ac- cident branch. He cm-phasizcd particularly the increase in Group Life insurance and Group Sickness and Accident, which is rapidly expand- mg, thus providing a rcal service to our country's increasing popu-

rc-ported that The

35,010,000 in Surplus Earnings was distributed to policyholders in 1950, continuing the Company's outstanding record of providing low net cost life insiinancc. Mr. Pequegnat stated that it was significant that 4096 of the new insurance sold during 1950 was additional insur- ance on the lives of policyiholders.

Condensation of the addresses as delivered by Mr. Lang and Mr.

is better balance culture. development of raw materials, and manufacturing. This country. is. as a result, bet- ter prepared than ever to deal with today's complex internation- al problems. Dang - of Inflation to Country's Economy

Nevertheless. the present situa- tion calls for caution: as John Maynard Keynes has pointed out in his "Economic Consequences of the Peace". Lenin declared that the quickest. and most effective way to destroy social and eco- nomic order in ii country is tihrough the process of ruriaway inflation.

Progressive rapid deterioration in the value of money can pro- duce only economic chaos. Rel- ative stnbility in the purchasing power of money is essential to the efficlent functioning of our demo-

between agri-

-cratlc free enterprise system.

During 1950 We experienced a resurgence of inflationmry forces which have carried wholesale commodity prices and living costs to new peaks. There is no immedi- ato indication cf anything but continuation of these pressures, because the imposition of grwater defence expenditures on an econ- omy already operating at. almost full capacity may be expected to generate new purchasing power inapplicable to a gradually shrink- supply of goods available for con- sumption. Adequate control of these forces requires timely and fortihrlght action on the part. of Governments. and intelligent and willing co-operation on the part of all citizens, Increased produc- tion by each individual worker is of prime importance; for, over such a period, expanding produc- tion is one of the most. effective weapons in the fight. against. in- fiaticri.

Public should support Government's Efforts by saving

In considerable degree, condi- tions in this country are influ- enocd by trends in the United States; and it. is probable that more rigoric-us controls may have to be applied here. Fortunately. those in our Government. who are responsible for the direction and adminsti-ation of our economic policies are among the ablest. and best. qualified in their field. With- out, however. a full measure of public understanding and public support. their efforts can be large- ly nullified; because. in the final analysis. the control of inflation is dependent on the extent of which the ova-all program is ac- cepted and canted out by the great mass of people.

We, as a nation. cannot make large outlays for national defence without some adjustments in our standards of living. Now is a time for us to exercise those qualities of self-restraint whim have been oharictoristic of this country in times of stress. The most effective way for individuals. business and governments to combat inflation is to spend for ncnesaontlals an Ihsolnto minimum and maintain - or increase. if possible, to the maximum -- their saving scale.

Government Action Noodod To Curb Inflation

Governmental action should fol- low a course which will reduce sharp and without. exception all oxpon iturea that are not abso- lutoly essential. and curb waste in all governmental activities. Taxes will have to be inoroasod. fiscal controls imposed. and credit tightened. Reasonable flexibility in interest ram should be per- mittod to onooingo saving and koop money opt of tho qaondins s

I

ion continuously with a. view to

81st Year

Insurance Premium Dollars Play Vital Anti-Inflation Bola Every dollar cur Plaid Force is aiblo to hannel into life insurance helps to retard the inflationary trend. These dollars are not only directed to future security and wftfidravwn from competitive cir- culatlon but, in large measure, are made avsiiable for the ox- tenskn of the productive capacity of the nation: They aid in pro- servlng the value of all insurance contracts. thus providing sound protection to Canadian homes. and at. the same trnc safeguard the national economy. The answer to the inflationary trend is not to sell less life insurance but to sell more and at. the same time to do the other things we ought to do to keep the price level from get- ting out of hand. -

Mutual Life Continues steady Progress

An examination of the Mutual Life cumulative figures from 1810 to 1950 shows a remarkably even progression. There are no spec- tacular deviations, not.wit.hst.and- lug severe disturbances and dis- locations. caused by lcng war Def- lods, with their equally difficult. nftemiaths; and the vagaries of trade and the weather.

Growth In Group Insurance and sienna. uni Accident Benefits Included in' our assurances in

force is a substantial and increas- lng amount. of group life insur- ance. As well, cur Company has become more active in supplyins group accident and sickness bene- fits. In free democratic nations there is evident a distinct move- ment toward greater security for tall the people. I still believe strongly that. in the main. scour- lty to meet. adequately the needs of the individual can only be ob- tained through contracts written on an individual basis. However, group coverage is a practical me- thod cf providing a basic layer of seoirrity on a mass basis. thus transferring in some measure the burdens of the weak to the shoul- ders of the strong.

Value of Continuous services

of Trained Life Underwriter

Not. so many years ago. the average life insurance salesman was accustomed to sell insurance in a more or less ha.pha1.ard way -- either pushing pet plans. or simply endeavouring to convince prospective pclicy holders that any form of life insurance was a good buy. it. is not only important. to own life insurance. but it. is im- portant to have the kind of insur- ance that fits the needs of the lnd.ivid-ual.

In this modem age. circum- stances and needs change quickly: and it is of the greatest advan- tage to have the continuing scr- vice: of a consciantio trained life underwriter in reviewing per- lodically one's life insurance. our training program is being carried

giving the ultimate in professional advice on insurance matters.

Life Insnrpnoe Keystone in Security structure of Individual Abraham Lincoln said: "You

can not bring about prosperity by discouraging thrift. You can not. help men permanently by do- ing for them what they could and should do for themselves." are of the surest ways for an individual tobuildforhiaownfturcisto invest in a life insure e policy. It is indeed the keystone in the security atriicturo of the indi- vldual. '1'hrough building securi- ty for ourselves, our qualities of vigour. self-reliance and' initiative will reach their full development; and our nation will continue strong. and proud, and free. Future Calls for Vision. courage and Perseverance Canada has been a land of great areas, but small beginnings in ” efforts. 'mough sometimes we grumble about conditions of today. nevertheless our own lives are very much easier than thou oif our Oanadisn forebears. our picneer ancestors had the vision. the courage and the perseverance necessa y to lay the foundations of this great country. Their tasks were performed in the midst of other wan. depressions, periods of expansion and ups and downs of human existence. but. they did not fail. 'IIiey persisted and won: and we must try. to the butof our ability, to follow their example and carry forward to an extent they did not dream of. the hopes and plans which they entortoined and from which we are benefit- tlne. If we do this, our (fecund- snts will be grateful to us. as wosrotoourownancoatora. In gpito of difficulties and dangers. we should. and can. face the fu- turn with hope and courage. and also with confidence that freedom. justice and right -will prevail. OONDENSATION or

A. B. PIQUIGNAT. A.l.A-1'

l.s.A.

It is my privilege It-this time to analyst with you the accom- plishments of the Company dur- ing the mid-century year. For many years. in fact. since not the intneot earning capacity of life insurance suets has been stosdliy dirviiniuliilic. From a rats of o.is'.'- our av Wu-nod doolinedtoolovrolsmtbinista. mt year writiowod an increase and are gratified to roport anoth- ar almost equal inorouo. indicat- ing that the period of retrogra- alon may have come to an end. The ii-nprovunont of tho last two yours has restored the non rats

riowod faith in the ability of the Company to maintain the liberal basis of surplus ulstrlbution for which it has become famous.

Several factors have contribut- ed to this improvement in inter-

. . l:.&Pequeg-riat, General Manager

est urnings. The slight. rise in yields on high grade bonds has had an influence; possibly of greater effect has been me wider diversiflcatlcn of our asset struc- ture. our holdings of Canazlaln government bonds, accumulated during the war years, and which a year ago represented an of our invested assets. provided the op- portunity of exchange to advanc- age for provincial and other gilt.- edged securities. Our Canadian government bonds still re-presrnt 4095 of invested assets. and when it is recalled that in 1939. prior to the war, this type of security in- volved but 2292. of assets, im-proved earnings arising from a still wider diversification may be expected. Residential Mortgage Loans substantially Increased

The most potent. influence to- ward higher earnings is the large- ly increased investment in mort- gage lcana. almost entirely contin- ed to residential construction. Act- ive mortgage operations are being canted on in all parts of Canada. These mortgage loans, for the most. part, carry the guarantees associated with National Housing loans and the Company is proud of the important part. it. has play- ed ln the provision of adequate housing for cur pmple. The in- crease Ln our mortgage invest- ments during the year amounted to Sililo Million and these new represent siigihtly over 2092. of iii- vested assets compared with a lcw of ll.29t: in 1945.

New Type of Investment

"Real Estate for the production of income." now permitted by a recent amendment to the federal Insurance Act. comprises the cost of buildings occupied by commer- cial and industrial corpcrntlonr. of woven stability under long term leases providing rentals suf- ficient to amortize the original cost of the property wltlilu the lease period. In this way working capital is made available for cur- rent needs rather than tied up permanently in new ocnstruction. A substantial expansion of this type of investment. is expected.

Stock Investments Profltablo

-Stock investments, preferred and common. increased during the year by 83,600,000 to 314,500,000 and on this investment a yield of OM96 was realized. The market value shows an appreciation of 33.80000 cver book. The book value represents slightly less than 496 of total assets.

Mortality Experience Favorable

'Ilhe mortality experience during the past year wasyalmost. identical with that of the previous year and continues to provide a substantial wiitribuvtion to the surplus dis- tributed to policyholders. There has been little change in the in-

'-'ence of causes of death, heart and associated ailments taking their usual large toll; in fact, again an increase over the previ- ous year. Insurance companies are actively encouraging the ex- tensive research now being con- ducted in many fields of medicine, and we have good reason to hope that such research dforta will re- sult. in further improvement in mortality and morbidity.

Surplus Earnings Maintained

The surplus earnings of the Comlliny. 3.195.000. slightly high- er than the previous year, may the effect-of higher expenses in oil birgnohes of operation. All we factors which enter into the conduct of o life-insurance busi- ness reflect the trend which is all too evident. in today's economic picture.

snrplns rlbntion to Policyholders Exceeds :5 Million

Substantial appropriations have again been made to strengthen the aovonl reserve funds maln- tainod by the Company. It. has been traditional policy to make .. ision ' abnormal fluc- tuations in the earning power and value of our investments and in the factors which govern the suf- ficiency of the statutory reserves maintained to satisfy policy ob- ligstidia,

During the past year surplus distribution amounted to 35,010.- 000. exceeding the previous year's distribution by over 3100.000. our rooord of surplus distribution to

licyholdors continues who the envy of the life insurance industry and maintains for the Company its omit popularity with the Can- adian vuouc.

War Cialllo Affects Sales of -Nopv lnsil-once

from the standpoint of prcduc- tion of new business. momentous decision: had to be made. 'ITiese oontorod mostly on the serious threat of general war. occaslcnod by the Korean episode last June. The determining factor in arriving at our decision regarding the

to mm; which onoounsos rs-

IIIO M I WI! CIIIIIO WII. I11 OMIIIC.

the protection of existing policy- holders and the grave implications of the war situation as it. exists today fully justify the action we have taken. The outcome of the negotiations now being carried on by the Assembly of the United Nations to find an amicable solu- tion to the Far East. problem will probably determine whether an early modification of the arm- ed services i- brictioris in el- fecl: is epgpedlent. it is" norally agreed that uniformity of prac- tice among competing life com- panies is highly desirable in re- spect. to restrictive measures of this nature and to' this end we- have endeavouredato exert some leadership. However. while the state cf international affairs ooii- tinues as perplexing as it is at the moment, unanimit.y of opinion as to adequate war clause procedure can scarcely be ex ted.

New Business Totals S120,4d8.000

We have every reason to feel gratified that we are able to show pmdtlctlcn figures for the year of s1ao,4o8.ooo. slightly in excess of the previous year. 'Ilhis total in- cludcs new group insurance cases. involving a total of 37,460,000. It. does not include additions during the year to existing group cases nmounting to 534,600,000. making total acoretions to our group in- surance during the year of s42.- l00,000, as compared with 331,100,- 000 the previous year. The net re- suit. has been the largest increase in business in force ever shown by the Company. The total in force on December 31. 1950. atte.- reassurance, amounted to sl,l6ll,- 090.000. nn increase for the year of almost exactly S100 Million. The previous largest increase, &0,-l00,- 000. ccourred in 1949. Business in force totals represent life insur- nnce cnly and do not include an- nuities or the business of our Sick- ness and Accident branch. such encouraging results can only be produced by high quality business for which full credit must be given our highly qualified and most. cf- ficient field force.

Again the Company can boast a lnpse rate unequalled in Canada. and very much below the average for the industry.

Large Hospital-Medical Plan For Federal Public Service

The Group Accident and Sick- ness Branch of the company can- tinues to expand rapidly. special mention, however. should be made of our participation. along with three other Canadian life insur-I ance ccmpanies, in the largest group coverage of this type ever placed in this country. the Public Service of Canada I-lospit.al-Med- ical Plan. which already involves over 00.000 lives, and which will likely will be expanded to include 30.000 or 40,000 additional civil servants, our Company has accepted the responsibility of ndmlnlstcrlng this vast prcgi-am, of hospltallmtioii and surgical fee benefits and has established an office in Ottawa to facilitate its operations. We feel confident. tlint' the successful .nciminist.ratlon of this plan, which will operate on the mutual basis, and which in- cludes civil servants from New- fcundland to British Columbia should prove of real service to ihls important segment of our coun- try's population.

Responsibility of Life Under-

writer in Combating Inflation

In commending our Field Force on their splendid collective pro- ductlon achievement I wish to emphasize the important responsi- bility the life underwriter bears of not only safeguarding the fu- ture welfare c.f families and in- dividuals but. the national econ- omy as well. The inflationary pro- cess has expanded the pu. ” ' power of the entire employed population and the distrlbiitlon of this purchasing power will de- termine tihe ultimate scope of the inflation spiral. If this augment- ed purchasing power is devoted to present wants rather than fu- ture needs the ultimate result can only be wide-spread economic and social distress. If an increasing portion of personal incomes is de- voted to building up savings and security for the uncertdin days of the future. the lessened demand for the semi-luxuries of life will retard the advance in prices and provide real value to increased personal earnings. There is no group so well trained to advise on family income dlstrilviitlon as is the great body of qualified life underwriters.