Demand for life assurance and investment-related products increased substantially, as evidenced by the take-up of various products offered by Middlesea Valletta Life Assurance Company, shareholders attending the Middlesea Insurance's 26th annual general meeting were told.

The meeting approved a final dividend of 4.5c per 25c share amounting to Lm1,125,000, an increase of 29 per cent over last year. This amount will again be paid from the company's untaxed account and will therefore be subject to a final withholding tax of 15 per cent on distribution. This was the 23rd consecutive year that a dividend was declared and distributed.

In the year ended December 31, 2006 the group made a profit before tax of Lm3.6 million.

Middlesea's chairman, Mario C. Grech, said that when one considered that the group's result in 2005 had been favourably impacted by an exceptional net fair value movement in investments of Lm2.2 million, mainly as a result of a sharp rise in the value of domestic equities and the favourable run-off in incurred claims of Lm1.1 million, it was reassuring to note the improvement coming through in the companies' underlying performance reflecting a strong and varied operational portfolio and the continued successful implementation of the group's strategy.

Mr Grech reviewed the operations of the companies within the Middlesea Group last year.

The group's gross written premium in general business increased by 6.4 per cent over the preceding year, reaching Lm36 million with motor insurance representing 72 per cent of total premium written. This result was in line with the group's policy to achieve a balanced portfolio mix between motor and other classes of business, an objective which still had to be achieved.

The holding company, Middlesea Insurance plc, produced positive net underwriting results for all classes, except for liability and health. Selective underwriting, a disciplined approach to pricing, efficient claims handling and strict cost control, allowed Middlesea to achieve a satisfactory technical result of Lm1.6 million for the year.

The subsidiary company Progress Assicurazioni SpA again produced positive results. The liability class of business both in Malta and overseas should be seen in the light of increasing court awards on injuries, coupled with the inflationary effect caused by prolonged periods for the settlement of claims and the resultant strengthening of reserves, Middlesea said.

Progress registered a technical result of Lm1.1 million.

Membership of the European Union triggered considerable interest from international companies looking at Malta as a financial centre to register in and operate from.

International Insurance Management Services, though facing strong foreign competition, was committed to offering professional management services to international companies, including insurers, reinsurers and captives. Middlesea Group believed there were distinct opportunities in this market and continued with endeavours to increase the portfolio of third party business, Mr Grech said.

In 2006, Middlesea's associate, Middlesea Valletta Life Assurance Company (MSV), persevered in its successful operations through its multi-channel distribution network. The company last year launched the second tranche of its capital guaranteed products, through the MSV capital guaranteed bond. The tranche was fully subscribed.

MSV continued to experience a strong demand for savings products, with the MSV single premium plan being a large contributor to the total business written by the company, at Lm50.4 million, an increase of 28 per cent over last year.

The group, besides maintaining its presence in Gibraltar and seeking further growth over the medium term, is also seeking to expand further in the Italian market through Middlesea Valletta Life Assurance Co., Mr Grech told shareholders. This year, the company was authorised by the MFSA to carry on long-term business under the provisions of freedom to provide services in Italy. The group remains committed to expanding outside the Maltese shores, Mr Grech concluded.

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