Middlesea Valletta Life Assurance Co. Ltd has registered a profit before tax of €7.64 million for the year ended 31 December 2009 – an increase of €6.44 million over 2008. Profit after tax increased from €1.92 million in 2008 to €6.20 million in 2009.
Business Written increased by 14 per cent ,from €110 million in 2008 to €125 million in 2009, while the company’s Total Assets increased by 19 per cent from €843 million at the end of 2008 to €999 million at the end of 2009.
Total Equity at the close of 2009 amounted to €107 million, an increase of 19 per cent over the previous year, while the Earnings per Share increased from 12c3 in 2008 to 37c in 2009.
MSV chairman Roderick Chalmers commented: “These results are the best ever registered by MSV since its establishment in 1994, and coincide with MSV’s 15th anniversary. It is indeed encouraging that these results were registered only a year after the unprecedented financial turmoil experienced in 2008.”
He added: “MSV has benefited from the strong recovery of the international capital markets in the second half of 2009, as its conservatively positioned and diversified portfolio of quality assets was well placed to capture the upturn in investment markets.
“Simultaneously, MSV continued to experience a strong demand for its savings related insurance policies. MSV is reaping the benefits of its strategy of promoting and providing a broad range of value-for-money savings, investment and protection products and services through a multi-channel distribution platform.”
MSV’s Board of Directors approved a resolution whereby differential rates of Regular Bonuses were declared in respect of with-profits plans held with MSV for the year ending 31 December 2009. The Bonus Rates are 3.25 per cent for the Comprehensive Life Plan (regular and single premium policies), 3.45 per cent in respect of the Comprehensive Flexi Plan (regular and single premium policies), 3.45 per cent under the Single Premium Plan and 3.45 per cent under the with-profits option of the MSV Investment Bond and of the MSV Retirement Plan.
On the ‘Old Series’ Endowment and Whole Life policies, a Regular Bonus of 2.2 per cent of the basic sum assured plus bonuses was declared.
Finally, the Board also approved a Regular Bonus of 3.45 per cent on those Secure Growth policies which formed part of the portfolio of business transferred to MSV from Assicurazioni Generali SpA during 2000.
Mr Chalmers said, “Strong capitalisation is necessary to support the business strategy of MSV, while at the same time meeting in full the requirements of policyholders and the insurance regulator. The shareholders of MSV, namely Bank of Valletta plc and Middlesea Insurance plc, are wholly committed to ensuring that MSV is well capitalised at all times. Indeed, during 2009 the shareholders of MSV continued to show this commitment by increasing the issued share capital of the company from €41.75 million to €51.75 million.”
Mr Chalmers announced that MSV is currently going through a major review and reorganisation of its management structure and operations. He elaborated: “The size and rapid growth of MSV requires that the company migrates away from its current dependency on outsourced and shared services, and becomes a fully self-sufficient, stand alone corporation.”
MSV CEO David Curmi said: “MSV’s results for 2009 are evidence of the success of its strategies. The consistency in performance MSV has achieved over the years reflects the benefits gained by constantly focusing on the needs of its customers. During 2009, MSV continued to strengthen its position in the local market as the leading provider of life insurance, long-term savings and retirement planning. Through the combination of a strong brand, solid reputation, financial strength, product breadth and distribution reach, in particular the successful bancassurance partnership with Bank of Valletta, MSV is set to continue growing its business in the local market by developing new products, by creating new demands for life and investment related products, and by delivering the highest standards of service in all its business activities and processes.
“The most important factor which affects bonus rates on with-profits investments is the underlying investment performance of the funds invested. The bonus philosophy of MSV is centred on the ability to pay supportable bonus rates to policyholders in the medium term. We therefore aim to smooth returns under our with-profits polices during the term of the policy. Smoothing entails establishing reserves from certain favourable years to compensate for unfavourable returns in certain other years during the policy term. Notwithstanding the prudent investment policy adopted by MSV, past performance is no guarantee for the future.
“Although MSV’s with-profits investments have generally provided MSV policyholders with satisfactory returns when compared with other similar investment products, investment returns could fluctuate further in the light of the current uncertainty in the capital market. Fair value movements and lower investment returns impinge directly on the rates of bonuses declared by MSV. Regular Bonuses are therefore expected to vary over the lifetime of the policy.”