Middlesea Insurance plc (MSI) registered an operating profit before tax of Lm3.65 million (€8.5m) for the year ended 31 December, 2006. Group executive chairman Mario C. Grech observed that Middlesea’s previous year’s figures had been very favourably impacted by an exceptional net fair value movement in investments of Lm2.2 million (e5.1m), mainly as a result of a sharp rise in the value of domestic equities, against a loss of Lm0.17 million (e0.40m) in 2006.
The other item affecting the comparative results was the favourable run-off in incurred claims of Lm1.10 million (e2.56m) in 2005, compared to Lm0.37 million (e0.86m) in 2006. Other companies in the group attained encouraging results, reflecting a strong and varied operational portfolio and the continued successful implementation of the group’s
strategy.
The board of directors, meeting on Thursday, agreed that, in line with the company’s dividend policy of ensuring the sustainable enhancement of its balance sheet, they would recommend the payment of a final dividend of 4.5 cents per ordinary share of 25c. This amounts to Lm1,125,000, an increase of 29 per cent over 2005 (exclusive of the special dividend paid in that year on the occasion of the 25th anniversary of Middlesea Insurance plc).
Middlesea’s shareholders’ funds grew by nine per cent to Lm33.74 million (e78.6m) during 2006. The net asset value per 25c share increased to Lm1.35. Earnings per share decreased to 12c7. Total group assets increased by nine per cent to Lm118.2 million (e275.3m). Gross technical reserves remained very strong, increasing from last year by over eight per cent to Lm65.40 million (e152.3m).
Mr Grech said it was encouraging that the group’s overall business net operating ratio (net of reinsurance but before allocation of investment income) was running at 98 per cent. After taking into consideration investment income, it improved to 91 per cent. A return of 9.4 per cent was registered on capital employed and the ratio of net technical reserves to net premiums remained unchanged at 181 per cent.
Middlesea’s associate, Middlesea Valletta Life Assurance Company Ltd (MSV), contributed positively to the group’s overall result, with a share of profit after tax of Lm1.49 million (e3.47m). The demand for life assurance and investment related products in Malta increased substantially, as evidenced by the take up of the various products offered by MSV. The company continued to experience a strong demand for savings products with the Euro Capital Guarantee Bond Fund and the MSV Single Premium Plan being the largest contributors to the total business written by the company. This amounted to Lm50.4 million (e117.4 m).
The group maintained its presence in Gibraltar and was seeking further growth over the short to medium term. Mr Grech stated that the strategy of the group was to continue moving towards achieving a greater territorial spread and having a better mix of business and varied distribution channels, as well as to diversify into non-risk insurance operations.