Middlesea to 're-visit' group structure

In line with Middlesea Insurance plc's dividend policy of enhancing its balance sheet and ensuring future sustainability, the 27th annual general meeting on Wednesday approved a dividend distribution of a final dividend of €0.1281 (Lm0.05c5) per €0.582343 (25c) share, amounting to €3,202,500 (Lm1,375,000), an increase of 22 per cent over last year. This was the 24th consecutive year that a dividend was declared and distributed.

Middlesea executive chairman Mario C. Grech reminded shareholders that at the previous year's AGM he had reported satisfactory overall results, but had cautioned that future expectations needed to be based on a prudent analytical appreciation. The inherent uncertain nature of insurance risk business, which was reflected in the cyclical movements both in the investment capital and technical operations, presented a continuous challenge in achieving well-defined objectives.

The overall group result for the year ended December 31, 2007, was a profit before tax of €9.3 million (Lm4 million) that reflected an increase of nine per cent over the corresponding period in 2006.

Mr Grech indicated that the first six months this year will give negative investment results: "The group's gross written premium in general business increased by over 24 per cent over the preceding year reaching €104.2 million (Lm44.7 million). The group's prudent investment policy once again paid off".

The holding company, Middlesea Insurance plc, registered a profit before tax of €6.97 million (Lm3 million) a growth of almost eight per cent over the profitability registered in 2006. The Italian subsidiary company, Progress Assicurazioni SpA, strengthened its position in business growth and coupled with its continued strict pricing policy booked a gross premium of €71.28 million (Lm30.6 million) that reflected an increase of 35 per cent over the previous year.

In 2007, Middlesea's associate Middlesea Valletta Life Assurance Company (MSV) persevered in its successful operations through its distribution network with total business written by the company amounting to €135.90 million (Lm58.34 million), an increase of 16 per cent over the previous year. The demand for life assurance and investment-related products in Malta increased substantially, and MSV registered a profit before tax of €7.24 million (Lm3.11 million) that amounted to an increase of almost 11 per cent over the previous year. However the higher incidence of income tax expense reduced this improvement and consequently MSV share to this year's profit decreased to €2.63 million (Lm1.13 million).

"Our medium-term strategy remains constant in seeking and identifying international partners that offer the required synergies to realise further overseas expansion with a total focus on primary insurance markets," Mr Grech said. "This year, the board will be re-visiting the group's structure and the balance sheet strength of all companies within the Middlesea Group.

"This will enhance clarity, ensure group board focus on all components, separate board focus on Middlesea Group's needs, place all operating companies at par, make shareholding reporting easier, enhance segregation for regulatory, risk and capital rationalising purposes and add business flexibility for strategic partners. This will give the broup the necessary infrastructure to enable it to face future challenges."

The AGM passed two extraordinary resolutions authorising the company to buy back its own shares in certain specific circumstances to contribute to a stable market and to renominalise and increase the share capital of the company from €0.582343 (25c) share to €0.60 per share through the capitalisation of retained profits.

The new board appointed Mario Grech executive chairman and Roderick Chalmers deputy chairman.

Middlesea Group is comprised of Middlesea Insurance plc, Middlesea Valletta Life Assurance Company Ltd, International Insurance Management Services Ltd, Growth Investments Ltd and Progress Assicurazioni S.p.A. which are licensed by their respective authorities.