In the first six months of 2009, Middlesea Valletta Life Assurance Co. Ltd, Malta’s largest life insurance company, registered a significant improvement in investment returns, as equity and bond markets started to regain their composure following a period of extreme volatility between September 2008 and March 2009.
Business written during the first six months of 2009 amounted to E50.11 million, the company said in a statement issued this week.
Although this represents a reduction over the same period last year, the company observed, MSV experienced an encouraging increase in demand for protection policies and regular savings plans. On the other hand, the volatility in financial markets led to a lower demand for the riskier type of savings related polices, in particular unit-linked policies, whilst the subdued consumer confidence led to a reduction in single premium investments. The bancassurance partnership with Bank of Valletta continued to perform strongly and remains MSV’s most important channel of distribution.
Total Assets increased by five per cent from E843.02 million to E883.92 million, mainly due to an increase in the value of the investments held by MSV.
Gross Investment Income increased from a loss of E21.06 million as at 30 June 2008, to an income of E8.20 million as at 30 June 2009, as unrealised capital losses reduced from E35.27 million during the first six months of 2008 to E6.33 million as at 30 June 2009. MSV continues to adopt a very prudent long-term investment strategy, which aims to preserve the capital value of its investments.
Administrative costs also reduced from E3.03 million as at 30 June 2008 to E2.79 million as at 30 June 2009. This was possible due to increased operational efficiencies.
MSV registered a profit before tax for the six months to 30 June 2009 of E486,726.
The shareholders of MSV, namely Bank of Valletta and Middlesea Insurance, are wholly committed to maintaining a strong capital position for the company in order to sustain the business strategy of future growth, and to meet the new regulatory capital requirements for life companies which will come into effect on 1 January 2010. Accordingly, the shareholders of MSV resolved to further increase the issued share capital of the company from E41.75 million to E44.25 million, with effect from 31 August 2009, with the injection of new capital. With effect from the same date, the authorised share capital of MSV will be increased from E50 million to E60 million.
Through the combination of a strong brand, financial strength, product breadth, distribution reach, in particular the successful bancassurance partnership with Bank of Valletta plc, MSV remains well poised to maintain its position as the leader in the individual protection and long term savings market in Malta. While challenging economic times are clearly not yet over, the consistent performance and strong financial and operational base of MSV put it firmly on track for a positive financial year.