Middlesea Valletta Life posts €7.24 million pre-tax profit

Middlesea Valletta Life Assurance Co. Ltd (MSV) has registered a profit before tax of €7.24 million (Lm3.11 million) for the year ended December 31, 2007.

This represents an increase of 10 per cent over the previous year. The profit after tax amounted to €5.26 million (Lm2.26 million) compared to €6.96 million (Lm2.99 million) recorded in 2006.

A 24 per cent drop in the after tax profit is due to the fact that the 2006 change was stated net of a tax credit adjustment relating to prior years.

Business written increased by 16 per cent from €117.32 million (Lm50.36 million) in 2006 to €135.91 million (Lm58.35 million) last year while the company's total assets rose by 16 per cent from €717.37 million (Lm307.97 million) in 2006 to €832.25 million (Lm357.29 million) at the end of last year.

MSV chairman Roderick Chalmers said: "In 2007, MSV produced another satisfactory performance in challenging circumstances. Through a combination of a strong brand, financial strength, product breadth and distribution reach, MSV maintained its position as the market leader in the individual protection and long term savings market in Malta.

"While in 2007 total business written increased by 16 per cent, gross premiums in respect of with-profits investments increased by 25 per cent as the volatility in the financial markets led policyholders to show a preference towards less risky investments. The Bancassurance partnership with Bank of Valletta plc continued to perform strongly and remains MSV's most important channel of distribution."

"The shareholders of MSV, namely Middlesea Insurance plc and Bank of Valletta plc, are committed to continue to strengthen the financial position of the company in order to sustain its business strategy for future growth."

The annual general meeting approved the payment of a final dividend of €4.81 million (Lm2.06 million) net of tax, which dividend has been reinvested by shareholders partly as consideration for the re-nominalisation of shares to the new nominal and paid up value of €2.50 each share (necessitated by the conversion to euro) and partly as consideration for a new share issue of 900,000 ordinary shares of €2.50 per share. Consequently, the issued and fully paid up capital of MSV was increased from €35 million to €39.75 million."

The board of directors approved a resolution whereby differential rates of reversionary bonuses were declared in respect of with-profits plans held with MSV for the year ending December 31, 2007. These amounted to 4.05 per cent for the comprehensive life plan (regular and single premium policies), 4.35 per cent in respect of the comprehensive flexi plan (regular and single premium policies), 4.5 per cent under the single premium plan and 4.5 per cent under the with-profits option of the MSV investment bond.

For the third consecutive year, the board also approved the declaration of a terminal bonus in respect of comprehensive life plan (single and regular premium) policies that have been in force for more than 10 years.

The terminal bonus will be paid on claims payable as a result of death or maturity between January 1 and the next bonus declaration, at a rate of 1.5 per cent for every year after the 10th year of the policy, subject to a maximum of five per cent. This terminal bonus will be paid on the value of the policy account as at the date of death or maturity.

On the "old series" endowment and whole life policies, a reversionary bonus of 2.2 per cent of the basic sum assured plus bonuses was declared.

Although no terminal bonus has been declared for such policies on claims arising out of death or maturity during this year, any terminal bonus declared on the "old series" policies accumulated over previous years to date shall remain payable on such claims occurring this year.

The board also approved a reversionary 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.

MSV will shortly be sending policy account and bonus statements to all policyholders holding with-profits investments with the company.