Financial results achieved last year by Middlesea Insurance plc has led to a dividend distribution of Lm750,000 which was announced at its 24th annual general meeting on Friday.

The dividend will again be paid from the company's untaxed account and will be subject to a final withholding tax of 15% on distribution.

During the meeting, Middlesea chairman Mario Grech made reference to the formidable challenges which the insurance sector had faced since 2000.

During these years, the company had revisited important decisions and retained its consistent strategy, which continued to be focused on, providing a broad range of products through multi-channel distribution, applying technically correct pricing and ensuring adequate reserving, with a rigorous policy of improving cost efficiency.

Middlesea continued to employ an efficient capital structure through the deployment of shareholders' equity across the Middlesea Group. The ultimate aim was to maximise potential for profitable growth. The operations of Middlesea Insurance plc, Middlesea Valletta Life Assurance Co. Ltd, Progress Assicurazioni (SpA) and International Insurance Management Services Ltd all contributed positively to the overall result.

The gross premiums written by the group amounted to just under Lm36 million. Middlesea persevered with a process of market share consolidation by focusing on the restructuring of the underlying portfolio in Malta, Gibraltar and Italy.

Net technical reserves increased by 13% to Lm47.2 million and the ratio of net technical reserves to net premiums written was 160% at the end of the year.

Meanwhile, shareholders' funds grew by 10% to Lm24.07 million. The net asset value per share was Lm1.93 and the earnings per share increased by 49% to 12c7. The total group assets increased by almost seven per cent to Lm100.2 million.

"These positive results helped to enhance the balance sheet on which the company strives for future growth, produce acceptable returns to shareholders and deliver our commitments to customers," Mr Grech said.

While 2003 was not a year of strong operational performance for Middlesea Insurance plc, this cannot be said for last year.

The gross premiums written by Middlesea Insurance plc, increased to Lm14.3 million (including Group Life). Motor insurance remained the major contributor to the general insurance retail business.

This disciplined approach enabled Middlesea to register a considerable improvement in the overall Net Underwriting Result which registered a surplus of Lm700,000 compared to the Lm560,000 loss in 2003.

Middlesea's majority interest in Progressi Assicurazioni continued to be an important contributor to the overall operations, with gross premiums written being approximately €50 million.

It was encouraging that this subsidiary company registered a total profit in its accounts of €2.5 million, resulting in a contribution before tax of €700,000 to the group. A decision by shareholders to increase the capital base saw an increase in the capital to €15 million by the end of last year.

The group's total investments, excluding its share in Middlesea Valletta Life Assurance Co. Ltd, amounted to Lm58.06 million. Global equity markets delivered a relatively good overall performance in 2004, despite the slackening economy and sharp rise in energy prices, which dampened earnings prospects. Returns were stronger in Asia and in Europe than in the US.

Middlesea Valletta Life Assurance Co. Ltd, in its 10th year of operation, also contributed positively to the group's overall result with a total profit after tax increasing to Lm1.52 million.

"Middlesea has been through various experiences and the dynamism of the insurance sector both locally and internationally will continue to present challenges," Mr Grech said.

"We have come through unscathed as a result of the high professional level of staff together with the directors, who bring a varied and wide experience in finance, commerce and professional disciplines.

"Middlesea's future direction is clearly based on its strategy of business mix, geographical spread, varied distribution and absolute resolve to succeed."

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