Middlesea Group has registered a post-tax loss of €1.61 million for the first six months of 2008. Last year, it registered a profit of €2.84 million.
Middlesea Group executive chairman Mario C. Grech said: "Technical insurance results before investment income have shown positive movements in our operations. However, as advised in my statements in May and June, the turmoil experienced in the capital markets, both locally and internationally, during the first six months of 2008 have had a significant negative impact on the half year results of 2008."
In line with the group's accounting policies, fair value movements on the equity and bond portfolios were taken directly to the profit and loss account, and the cyclical nature of the financial markets had a direct impact on the positive technical result. The fair value losses on the investment portfolio amounted to €5.9 million, as compared to a marginal gain of €0.16 million in the previous year.
Middlesea Insurance plc registered an increase in turnover of six per cent in business written in Malta and Gibraltar during this reporting period as compared to 2007. The technical results reflect the prudent underwriting strategy adopted by the company. Before the impact of the investment return, Middlesea Insurance plc registered a positive technical result of €1.44 million as compared to €0.99 million in 2007. Further strengthening was registered in the gross technical reserves of the company which increased by 8.5 per cent to €53 million during the six-month period.
Progress Assicurazioni SpA continued to pursue its strategy of growth in the Italian market with premiums written totalling €44.8 million, an increase of 33 per cent over 2007. The contribution of this subsidiary towards the result after tax of the group also reflected the negative impact of the international financial markets which reduced the subsidiary's performance to a loss of €0.52 million from a profit of €1.28 million in June 2007. Middlesea Valletta Life Assurance, the associate company, registered a decrease in turnover with business written amounting to €59.7 million during the reporting period as compared to €67.6 million in the previous year.
With an investment portfolio of €671 million, the investment return of this company reflected the negative performance experienced in the financial markets. Nevertheless, the associate company's contribution towards the group's result for the six months up to June 30 remained positive, at € 0.41 million, as compared to €0.9 million for the same period last year.
The group's gross technical reserves reflect an increase of 7.7 per cent over the reserves at December 31, 2007, and totalled €187.27 million. Total assets increased by 4.3 per cent during the six months and the group holds a total position of €313.82 million.
The shareholders' funds amounted to €77.2 million, a reduction of €5.4 million from December 2007.
This reduction resulted from the group's loss for the period together with the distribution of dividends of €3.2 million approved by the shareholders during the AGM in June.
At €80.4 million, the Middlesea Group balance sheet remained strong, in line with the current strategies.